0  r2/^ 


THE  LIBRARY 

OF 

THE  UNIVERSITY 

OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


THE  LAW  OF  AGENCY 


THE  LAW  OF  AGENCY  "^^' 

INCLUDIiNG 

THE   LAW   OF   PRINCIPAL   AND   AGENT 

AND 

THE  LAW  OF  MASTER  AND  SERVANT 

BY 

ERNEST  W.  HUFFCUT 

n\ 
PROFESSOK    OF    LAW    IN    THE    CORNELL    UNIVERSITY 
COLLEGE    OF    LAW 


SECOND    EDITION 
REVISED    AND    ENLARGED 


BOSTON 

LITTLE,  BROWN,  AND   COMPANY 

1901 


Copyright,  1895,  1901, 
By  Ernest  W.  Huffcot. 


\9or\ 


University  Press  : 
John  Wilson  and  Son,  Cambridge,  U.S.A. 


PREFACE  TO  THE  SECOND  EDITION. 


The  primary  purpose  of  this  volume  is  to  set  forth  the  man- 
ner in  whicli  obligations  are  incurred  or  rights  acquired 
through  the  acts  of  agents  and  servants,  and  to  do  this  as  a 
natural  sequence  to  a  study  of  the  manner  in  which  like  ob- 
ligations are  incurred  or  like  rights  acquired  by  one's  own 
acts.  Book  I.  deals  with  the  law  of  Principal  and  Agent ;  that 
is,  the  law  of  agency  in  its  application  to  the  creation  of  pri- 
mary obligations,  mainly  those  of  contract.  Book  II.  deals  with 
tlie  law  of  Master  and  Servant ;  that  is,  the  law  of  agency  in 
its  application  to  the  creation  of  secondary  or  substituted  ob- 
ligations, mainly  those  in  tort.  Book  I.  may  therefore  properly 
supplement  a  study  of  the  law  of  contract,  and  Book  II.  a  study 
of  the  law  of  tort.  Book  I.  is  largely  rewritten,  and  Book  II. 
appears  for  the  first  time  in  this  edition  :  the  whole  constitutes 
practically  a  new  work. 

An  attempt  has  been  made  in  the  Introduction  to  state 
clearly  the  distinction  between  an  agent  and  a  servant,  and 
the  legal  consequences  that  flow  from  such  a  distinction. 
This  is  more  fully  developed  in  the  sections  dealing  with  the 
liability  of  a  principal  or  a  master  for  acts  of  the  agent  or  ser- 
vant in  excess  of  the  authority.  It  is  believed  that  this  dis- 
tinction is  not  merely  a  theoretically  valid  one,  but  that  it  is  a 
necessary  means  to  the  correct  solution  of  the  problem  of  the 
constituent's  liability,  especially  in  the  case  of  an  agent's 
frauds,  and  that  the  failure  to  observe  it  has  led  to  needless 
confusion. 

While  no  attempt  has  been  made  to  cite  all  decided  cases  in 
agency  in  all  of  the  fifty  or  more  jurisdictions  from  which 
authorities  may  be  gathered,  there  has  been  a  painstaking 


734018 


vm  PREFACE   TO   THE   SECOND   EDITION. 

cl'fort  to  cite  an  adequate  number  of  authoritative  and  well- 
reasoned  cases,  and  upon  all  controverted  questions  to  make 
tlie  citations  as  full  as  the  scope  of  the  work  would  permit. 

In  its  enlarged  form  this  work  covers  the  whole  held  of 
agency,  and,  it  is  hoped,  may  i»rove  useful  not  only  to  the 
student  but  also  to  the  practitioner. 

E.  W.  11. 
CoKNELL  University  College  of  Law, 
August,  1901. 


TABLE    OF    CONTENTS. 


i3ooJi  I. 

PRINCIPAL  AND  AGENT. 

INTRODUCTION. 
CHAPTER  I. 

PRELIMINARY    TOPICS. 

Section  Page 

1.   Representation  iu  the  law  of  obligatiou 3 

2-    Meaning  and  scope  of  agency 5 

3.  Distinction  between  agency  and  otlier  legal  relations  ..'...  6 

4.  Distinction  between  the  law  of  principal  and  agent,  and  tlie  law 

of  master  and  servant 10 

5.  Basis  of  constituent's  liability  for  the  acts  of  his  representative      .  13 

6.  Definition  of  agent  and  servant 17 

7.  Classification  of  agents  and  servants 19 

8.  Divisions  of  the  subject  of  agency 21 

PART   I. 

FORMATION  OF  THE  RELATION  OF  PRINCIPAL  AND  AGENT. 
CHAPTER  IL 

FORMATION    OF    THE    RELATION    BY    AGREEMENT. 

10.  Elements  of  agreement 24 

1.   Agency  by  Contract. 

11.  Elements  of  contract 25 

12.  Forms  of  ao-reemeut 25 


X  TABLE    OF   CONTENTS. 

SecUon  Page 

13.  Consideration 26 

14.  Parties  —  Competency 27 

15.  — Infant  principal 27 

16.  —  Insane  principal 28 

17.  —  Married  women  as  principals 30 

18.  —  Cor|)()rations  as  principals 31 

19.  —  Partnerships  as  principals 32 

20.  —  Unincorporated  clubs  as  principals 32 

21.  — Aliens  as  principals 33 

22.  —  Joint  principals 33 

23.  —  Competency  of  agents 34 

24.  —  Joint  agents 35 

25.  —  Sub-agents 36 

26.  Form  of  contract 36 

27-    Legality  of  object 39 

2.    Gratuitous  Agents. 

28.  As  between  agent  and  third  party 40 

29.  As  between  principal  and  agent 40 


CHAPTER   III. 

FORMATION    OF    THE    RELATION    BY    RATIFICATION. 

30.  Meauiug  of  ratification 42 

1.   Elements  of  Ratification. 

31.  Analysis 43 

32.  Act  in  behalf  of  existing  principal 43 

33.  Assent  of  principal 46 

34.  Assent  may  be  express  or  implied 47 

35.  Assent  by  silence 49 

36-    Assent  must  be  in  toto  and  unconditional 50 

37.  Assent  must  be  free  from  mistake  or  fraud 50 

38.  Assent :  has  third  party  a  right  to  recede  before  assent  of  prin- 

cipal    52 

39.  Competency  of  principal 53 

40.  Fonn  of  ratification 55 

41.  Legality  or  validity  of  act :  general  rule 56 

42.  Same  :  exceptions  to  rule 57 

43.  Same  :  converse  of  rule 5S 

44.  Same  ;  ratification  of  forgery 58 


TABLE   OF   CONTENTS.  Xl 


2.  Legal  Effects  of  Ratification. 

Section  Pago 

45.  Ratification  is  irrevocable 59 

46.  Effect  as  betwceu  j)riucij)al  and  third  party 59 

47.  Eifect  as  betwceu  principal  aud  strangers 60 

48.  Efluct  as  between  principal  and  agent 60 

49.  Effect  as  between  agent  aud  third  party 61 


CHAPTER   IV. 

FORMATION    OF    THE   RELATION   BY   ESTOPPEL. 

50.  Agencies  not  resting  on  assent 62 

51.  Meaning  of  estoppel 62 

52.  Application  to  law  of  agency 64 

52  tf.   Application  to  agent's  torts 68 

53.  Limits  of  the  doctrine 70 

CHAPTER  V. 

FORMATION   OF   THE   RELATION    BY   NECESSITY. 

54.  General  doctrine  of  contracts  from  necessity 72 

55.  Agency  of  wife 72 

56.  Agency  of  infant  child  in  purchase  of  necessaries 74 

57.  Agency  of  shipmaster 74 

58.  Agency  of  unpaid  vendor 75 

59.  Other  illustrations 75 


CHAPTER  VI. 

TERMINATION    OF    THE    RELATION. 

60.   Ways  in  which  relation  may  be  terminated 77 


1.  By  Bilateral  Act. 

61.  By  terms  of  original  agreement 77 

62.  By  subsequent  agreement 78 

2.   By  Unilateral  Act. 

63-68.    Revocation 78 

69.    Renunciation 82 


XU  TABLE    OF   CONTENTS. 


3.   By  Operation  of  Law. 

Section  Page 

70.  By  change  affecting  subject-matter 82 

71.  By  cliauge  ill  condition  of  parties 84; 


4.  Irrevocable  Agencies. 
72.   Doctiiue  of  irrevocable  agencies 87 


PART   II. 

LEGAL  EFFECT  OF  THE  RELATION  AS  BETWEEN  PRINCIPAL 

AND  AGENT. 


CHAPTER  VII. 

OBLIGATIONS    OF    PRINCirAL    TO    AGENT. 

75-83.    Compensation  of  agent 92 

84.  Reimbursement  of  agent 103 

85.  Indemnity  to  agent 104 

86.  Non-assignability  of  obligations 105 


CHAPTER   VIII. 

OBLIGATIONS    OF   AGENT    TO    rUINCIPAL. 

1.    Agents  by  Contract. 

88.  Obedience 106 

89.  Prudence lOS 

90.  Good  fiiiili       .     -. 110 

91.  Accounting • 112 

92-95.    Acting  in  person :  appointment  of  sub-agents 115 

96.    Del  credere  agents 120 


2.    Oratuitous  Agents. 

97.  Obligations  of  gratuitous  agents 122 

98.  Gratuitous  bank  directors 124 


TABLE   OF   CONTENTS.  xiii 


PART   III. 

LEGAL  EFFECT  OF  THE  RELATION  AS  BETWEEN  THE 
PllINCIPAL  AND  THIRD   PARTIES. 

CHAPTER  IX. 

CONTRACT   OF   AGENT   IN   BEHALF    OF   A   DISCLOSED    PRINCIPAL. 

1.  In  Agencies  Generally. 

Section  Page 

100.  General  doctrine 127 

lOL    Contracts  actually  authorized 128 

102.  Contracts  apparently  authorized  :  estoppel 128 

103.  Ostensible  authority :  meaning 129 

101.  Same  :  general  and  special  agents 132 

105.  Same  :  public  agents 134 

106.  Same  :  elements  of  authority 135 

107.  Same :  illustrations 140 

108.  Contracts  unauthorized .•  I4.7 

109.  Contracts  voidable 148 

2.  In  Particular  Agencies. 

111.  Factors I49 

112.  Brokers 151 

113.  Auctioneers 153 

114.  Attorneys  at  law " 154 

115.  Bank  cashiers 155 

116.  Shipmasters 156 


CHAPTER  X. 

CONTRACT    OF   AGENT   IN    BEHALF   OF    UNDISCLOSED    PRINCIPAL. 

1.    The  Doctrine  of  Privity  of  Contract. 

118.  General  statement  of  the  doctrine 158 

119.  Application  to  agency  generally 160 

120.  Application  to  contract  for  undisclosed  principal 160 

121.  Suits  against  undisclosed  principal 162 

122.  Suits  by  undisclosed  principal 164 

123.  Parol  evidence  rule 164 


xiv  TABLE   OF   CONTENTS. 

2.    Liability  of  an  Undisclosed  Princijyal. 

Section  ^^eo 

1-24.    Geucral  rule !•''> 

125-128.   Exceptious 1(J7 

3.    Ricjlds  of  an  Undisclosed  Pniicipal. 

129.   General  rule 172 

130-135.   Exceptions 173 

CHAPTER  XL 

ADMISSIONS    AND    DECLARATIONS    OF   AGENT. 

136.  Object  in  proving  admissions      • 178 

137.  When  always  inadmissible 17S 

138.  Wiien  admissible  :  general  rule ISO 

139.  When  admissible  :  res  gestae 180 

110.   Limitation  of  rule  :  adverse  interest 185 

CHAPIER   XII. 

NOTICE    TO   AGENT. 

141.  General  statement  of  rule 186 

142.  Notice  acquired  during  transaction 1S7 

143.  Notice  outside  of  transaction,  but  Tvithin  general  scope  of  agency  187 

144.  Notice  before  agency  begins 188 

145.  General  qualifications 189 

146.  Application  of  rule  to  corporations 190 

147-    Notice  to  sub-agent 191 

CHAPTER  XIII. 

LIABILITY    OF    PRINCIPAL    FOR   TORTS    OF   AGENT. 

1.    Liability  for  Torts  Generally. 

148.  Distinction  between  servant's  torts  and  agent's  torts 193 

149.  Basis  of  master's  and  of  principal's  liability  for  tort 194 

150.  Nature  of  third  person's  remedies 19G 

2.   Liability  for  Frauds  and  Misrepresentations  of  Agent. 

151.  Eraud  and  misrepresentation  generally 197 

152.  Fraud  in  relation  to  agency :  deceit 1^7 

153.  Fraud  for  benefit  of  principal 200 

154.  Fraud  for  bencGt  of  agent 202 


TABLE   OF   CONTENTS.  XV 

Section  Page 

155.  Fraud  —  Issue  of  fictitious  stock  certificates 204 

156.  —  Issue  of  fictitious  bills  of  lading 206 

157.  —Other  illustrations 207 

3.    Liability  for  Influencing  Conduct  of  Other  Persons. 

158.  Representations  about  plaintiff 208 

159.  Inducing  breach  or  terminatiou  of  contract 209 

160.  Defamation 209 

161.  False  arrest  and  malicious  prosecution 210 


CHAPTER  XIV. 

LIABILITY   OP   THIRD    PERSON    TO   PRINCIPAL. 

1.    Contract  Obligations. 

163.  Contracts  by  agent 212 

164.  Contracts  in  name  of  principal 212 

165.  Contracts  in  name  of  agent 213 

2.    Quasi- Contract  Obligations. 

166.  Money  paid  by  mistake 214 

167.  Money  paid  under  duress  or  fraud 215 

3.  Tort  Obligations. 

168.  Property  diverted  by  agent :  general  rule 216 

169.  Exceptions  :  negotiable  instruments 217 

170.  Exceptions :  indicia  of  ownership 217 

171.  Exceptions  :  factors  acts 219 

172.  Forms  of  action  for  property  or  its  value 222 

173.  Wrongs  of  fraud  and  malice 223 

174.  Fraud  in  making  contract 223 

175.  Collusive  fraud 223 

176.  Interference  with  agency 224 

4.  Trust  Obligations. 

177.  Constructive  trusts 225 

178.  Following  trust  funds 225 

179.  Legal  remedies  for  diversion  of  trust  funds 227 


XVI  TABLE    OF   CONTENTS. 


PART   IV. 


LEGAL  EFFECT  OF  THE   RELATION  AS  BETWEEN  THE 
AGENT  AND  THIRD  PARTIES. 


CHAPTER  XV. 

CONTRACT    RELATIONS    BETWEEN    AGENT    AND    THIRD    PARTY. 

1.  W7ie}-e  Principal  alone  is  Bound, 

Section  Page 

182.  Authorized  contract 229 

2.  Wliere  Agent  alone  is  Bound. 

183.  Unautliorized  contract 230 

184.  Incompetent  principal 233 

185.  Fictitious  principal 233 

186.  Exclusive  credit  to  agent 235 

187.  Foreign  principal 236 

188.  Contract  under  seal 237 

189-195.    Negotiable  instruments :  construction  of  signatures      .     .     .  238 

3.  Where  both  Principal  and  Agent  are  Bound. 

196.  Undisclosed  principal 249 

197.  Simple  contract  signed  by  agent 250 

198.  Effect  of  custom 252 

199.  Interest  in  subject-matter 253 

4.   Wliere  neither  Principal  nor  Agent  is  Bound. 

200.  Revocation  of  authority  by  death 253 

201.  Disclosure  of  facts  affecting  authority 254 

202.  Insufficiency  of  form 254 

5.    Special  Case  of  Public  Agents. 

203.  Public  agents 254 

6.    Liability  of  Agent  in  Quasi-Contract. 

204.  Money  paid  agent  by  mistake  or  fraud 255 

205.  Money  received  to  use  of  third  party 257 


TABLE   OF   CONTENTS.  xvii 


7.  Liability  of  Third  Person  to  Agent. 

Section  Page 

207-    Where  agent  alone  may  sue 2.)S 

20S-20'J.    Where  either  principal  or  agent  may  sue     ....          .     .  2(;0 

210.   Liability  iu  quasi-contract 2G2 


CHAPTER  XVI. 

TORTS    BETWEEN    AGENT    AND    THIRD    PARTY. 

211.  Agent  liable  for  misfeasance 263 

212.  Whether  liable  for  non-feasance 2o;3 

213.  Special  instances  of  misfeasance 264- 

214.  Whether  principal  and  agent  liable  jointly 266 

215.  Liability  of  third  person  to  agent  for  torts 267 


23oo!t  II. 

MASTER  AND  SERVANT. 

INTRODUCTION. 

216.    Scope  of  the  subject  of  master  and  servant 271 

PART    I. 

WHO  IS  A  SERVANT? 
CHAPTER   XVII. 

INDEPENDENT     CONTRACTORS. 

218.  General  rule 274 

219.  Exceptions  —  Selecting  competent  contractor 275 

220.  — Contracting  for  nuisance 275 

221.  — Contracting  for  unsafe  result 276 

222.  —  Statutory  liability  to  construct  safely 276 

223.  — Contract  liability  to  construct  safely 277 

224.  —  Extra-hazardous  work 277 


Xviii  TABLE   OF    CONTENTS. 

Section  P»8!« 

2-2:).  Exceptions — Safety  of  premises 278 

221).                      — Interference  by  employer 278 

227.  Resumption  of  control  by  owner 279 

CHAPTER   XVllI. 

TRANSFER   OF    SERVICE. 

228.  General  rule .280 

220.    Hiring  horses  ami  driver 280 

230.  Hiring  macliine  and  operator 283 

231.  Servant  sent  to  work  on  another's  premises 284 

232.  Physician  employed  for  benefit  of  servants  or  passengers      .     .     .  28i 

233.  Sleeping-car  porters  also  servants  of  railroad  company     ....  285 

CHAPTER  XIX. 

COMPULSORY   EMPLOYMENT   OR   SERVICE. 

234.  Meaning 286 

235.  Liability  for  servant  compulsorily  employed 286 

236.  Status  of  one  compelled  to  serve 288 

237.  Parent  and  child 289 

238.  Husband  and  wife 289 

CHAPTER  XX. 

SUB-SERVANTS    AND    VOLUNTEERS. 

239.  Sub-servants 291 

210.    Volunteers 292 


PART    IT. 

LIABILITY  OF  MASTER  FOR  TORTS  AND  CRIMES  OF 
SERVANT. 

CHAPTER  XXI. 

LIABILITY   OF   MASTER   TO  THIRD  PERSONS    FOR   TORTS    OF   SERVANT. 

242.  Conditions  of  liability 295 

243.  Wrongdoer  must  be  defendant's  servant 295 

244.  Servant  must  be  about  his  master's  business 297 

245.  Servant  must  be  acting  within  the  course  of  bis  employment    .     .  298 


TABLE   OF   CONTENTS.  XIX 

Section  Page 

246.  Same  :  acts  commanded  by  master 299 

247.  Same  :  acts  ratified  liy  master 300 

248.  Same :  acts  which  master  reasouably  led  servant  to  believe  were 

authorized 301 

249.  Same:  acts  impliedly  authorized 302 

250.  Same  :  acts  for  master's  benefit 304 

251.  Same  :  acts  for  servant's  benefit 305 

252.  Wilful  or  malicious  torts  :  (1)  in  furtherance  of  the  employment  .  305 

253.  Same:  (2)  injuries  to  passengers 310 

254.  Same  :  (3)  misuse  of  dangerous  instrumentalities 311 

255.  Liability  of  master  for  exemplary  damages 313 

250.   Imputed  notice 314 

CHAPTER  XXII. 

LIABILITY    OF    PUBLIC    AGENCIES    OR   PUBLIC    CHARITIES    FOR  TORTS 
OF   SERVANTS. 

257-    General  doctrine 315 

258.  Liabihty  of  the  state  and  its  agencies 315 

259.  Liability  of  municipal  corporations 316 

260.  Lial)ility  of  public  officer 317 

261.  Liability  of  public  charity 318 

262.  Liability  of  private  person  served  by  public  officer 321 

CHAPTER  XXIII. 

LIABILITY   OF   MASTER   FOR    PENALTIES   AND    CRIMES. 

263.  Introductory 322 

264.  Liability  to  private  penalties 322 

265.  Criminal  liability  generally 323 

266.  Absolute  liability 324 

267-   Authorized  crimes 327 

268.   Negligent  failure  to  control 328 


PART  III. 

LIABILITY  OF  MASTER  FOR  INJURIES  TO  SERVANT. 
CHAPTER  XXIV. 

LIABILITY    OF    MASTER   TO    ONE    SERVANT   FOR   TORTS   OF   ANOTHER 

SERVANT. 

270.  Classification  of  servants 330 

271.  The  fellow-servant  rule 331 


XX  TABLE   OF   CONTENTS. 

Section  Page 

272.  Evolution  of  the  rule o32 

273.  Fellow-servants  enij)loyed  iu  the  same  common  service    ....  335 

274.  First  exception  :  the  vice-principal  doctrine 338 

275.  Same:  the  superior  officer  test 339 

276.  Same:  the  non-assignable  duty  test 340 

277.  Same  :  summary  of  vice-principal  doctrine 344 

278.  Second  exception :  incompetent  fellow-servants 3^4 

279.  Third  exception :  Statutory  provisions 345 


CHAPTER  XXV. 

LIABILITY    OF    MASTER    TO    SERVANTS    FOR    HIS    OWN    TORTS. 

280.  Introductory 350 

281.  Negligent  operative  act 350 

282.  Negligent  performance  of  uoa-assigaable  duties 351 

283.  Servant's  assumption  of  risks 352 

284.  Servant's  contributory  negligence 356 

285.  Wilful  torts 357 


PART    IV. 

LIABILITY  OF  SERVANT  FOR  TORTS. 
CHAPTER  XXVL 

servant's    LIABILITY    FOR    TORTS. 

1.  Liability  to  Master. 

287.  Gratuitous  service 360 

288.  Paid  service 3G0 

2.  Liability  to  Fellow- Servants. 

289.  Liable  to  co-servant  for  misfeasance 361 

3.  Liability  to  Third  Persons. 

290.  Liable  for  misfeasance,  but  not  for  non-feasance 362 

291.  Meaning  of  non-feasance 302 

292.  Misfeasance 365 

293.  Liability  for  torts  of  fellow-servants 365 

294.  Public  servants  :  acts  of  state 366 


TABLE   OF   CONTENTS.  XXI 


PART    V. 

LIABILITY  OF  THIRD  PERSON  TOR  TORTS  TO  MASTER  OR 

SERVANT. 

CHAPTER  XXVn. 

LIABILITY    OF    Tllllil)    PERSON    FOR   TORTS. 

Section  Page 

296.    Personal  injuries  to  servant 368 

297-    Seduction  of  servant 369 

298.  Enticing  away  a  servant 370 

299.  Procuring  discharge  or  nou-employment  of  servant 372 

300.  Summary  as  to  interference  with  contract  relations 373 

APPENDIX. 

New  York  Factors  Act 375 

English  Factors  Act 377 

Massachusetts  Employers'  Liability  Act 381 

INDEX 385 


CASES   CITED 


A. 

Page 

Abbey  v.  Chase  254 

Abbott  V.  Abbott  290 

V.  llapgood  44 

Abel  V.  Delaware  &  H.  C.  Co.  341, 

352 

V.  Sutton  l-'i8 

Abrabains  r.  Bullock  281 

V.  Dcakiu                       210,  308,  309 

V.  Kidney  369 

Abrath  v.  Northwestern  Ry.  211 

Ackert  i'.  Barker  103 

Adams  v.  Flanagan  146 

V.  Freeman  300 

V.  Ins.  Co.  139 

V.  Irviug  Nat.  Bank  201 

i;.  Power  56 

V.  Robinson  107 

Adams  Mining  Co.  v.  Senter  101 

Adumson  c.  Jarvis  104 

Addison  v.  G.indasequi  169,  235 

JFAua.  N.  B.  v.  Ins.  Co.  146 

Aggs  V.  Nicholson  244 

Agnes  Otto,  The  287 

Ahern  v.  Baker  77 

V.  Goodspeed  140,  141 

Alabama,  etc.,  R.  v.  Hawk  184 

Albany,  etc.,  Co.  v.  Luudberg  261 

Alhro  V.  Jaquith  361 

Alcorn's  Exec.  v.  Cook  38 

Aldrich  v.  Bostcm  &  Worcester  R.    298 

Aldridge  v.  Stuyvesaut  372 

Alexander  v.  Jones  50 

V.  Southey  265 

V.  University  101 

Alia  I".  Nadean  97 

Allan  I'.  State  Steamsliin  Co.  285 

Allen  r.  Bryson  26,  95 

V.  Colliery  Engineer's  Co.      96,  97 


Page 

Allen  V.  Flood  209,  267,  372,  373 

V.  Ilartfield  264 

V.  London,  etc.,  Ry.  303,  309 

V.  McKibbin  100 

V.  Merchants'  Bank  109,  119 

V.  Miller  244 

V.  News  Pub.  Co.  209 

V.  Railway  Co.  310 

V.  St.  Louis  Bank  219 

V.  South  Boston  R.  190,  206 

V.  Suydam  109 

Allkinsi^.'jupe  103,104 

Althorf  V.  Wolfe  291,  292 

Alton  V.  Midland  Ry.  3G8 

Americau  Wire  and   Nail  Co.  v. 

Bayless  206 

Ames  V.  Union  Ry.  Co.  224,  o>;8 

Ancona  v.  Marks  48,  213 

Anderson  v.  Boyer  283 

V.  Ogden,  etc.  Co.  340 

V.  Sanderson  182 

V.  State  327 

Andres  v.  Wells  309 

Andrews  v.  JEtna  Life  Ins.  Co.  52 

v.  Green  307 

Angel  V.  Felton  20O 

Angle  V.  Chicago,  etc.  Ry.    209,  224,  372 

Anon.  V.  Harrison  81 

Anonymous  (12  Mod.  514  (1701))       67 

Ap])eal  of  Kister!)Ock  206 

A]>pleton  V.  Biuks  2"{7 

Arey  v.  Hall  133 

Arff  *'.  Star  Fire  Ins.  Co.  IIS,  192 

Argersinger  v.  Macnaughton    141,  150, 

249 
Arkansas  Smelting  Co.  v.  Belden 

Mining  Co.  117,159 

Armita;;e  r.  Widoe  28,  53,  55,  58 

Armour  i-.  Mich.  Cent.  11.  195,  207 


XXIV 


CASES   CITED. 


Page 
Armstrong  v.  Oregon,  etc.  E.    334,  3.30, 

340 

V.  State  Iiis.  Co.  144 

V.  Stokes  168 

r.  Toler  39 

Arnold  V.  Hart  63 

V.  Poole  39 

('.  Swenson  248 

Arthur  v.  Barton  157 

Ash  v.  Guie  32,  234 

Asliley  V.  Dixon  372 

Ashtou  V.  Spiers  309 

Ashwortb  c.  Stanwix  3.50 

Atchison,  etc.  11.  v.  JMcKee  336 

V.  Zciler  284 

Atkinson  v.  Cotesworth  261 

Atkyns  v.  Amber  262 

Athiuta  R.  Co.  v.  Kimberly  274,  279 

Atlantic,  etc.  R.  v.  Dunn  314 

Atlas  8.S.  Co.  V.  Colombian  Land 

Co.  23.5 

Atlec  i\  Bartholomew  53 

Attorney-General  v.  Riddle  328 

V.  Siddon  328 

Attwood  V.  Munnings  136 

Audenried  v.  Bctteley  86 

Angust,  The  157 

Aulrman  v.  Lee  146 
Austin   r.  Guardians  of   Bethnal 

Green  39 

Austrian  v.  Springer  140 

Auty  V.  riutchinson  255 

Ayer  v.  Tilden  216 

Ayrault  v.  Pacific  Bank  120 


B. 

BaVicock  ;•.  Beman  247 

Bailey  v.  Rome,  etc.  R.  341 

V.  Troy,  etc.  Co.  9 

Bain  v.  Brown  110 

Baines  v.  Ewiiig          132,  133.  136,  144, 

147 

Bnird  i;.  Shipnian  264,  364,  365 

Baker  v.  Diusmore  216 

V.  Morris  289 

V.  New  York  N.  B.  226 

BaMorstoii  r.  Hubber  Co.  121 

Baldwin  v.  Bank  177,  248 

Baldwin  Bros  v.  Potter  112,  113 


Page 
Ball  !'.  Bruce  371 

Ballou  V.  Talbot  231,  241 

Baltimore,  etc.  R.  v.  Pierce  308 

Baltzcu  V.  Nicolay  23 1 ,  232,  233 

Bank  c.  American  Dock  &  Trust 

Co.  I'JO,  204,  206,  207 

V.  Bossieux  124 

j;.  Butler  120 

V.  Cook  241,  242 

r.  Cushman  191 

V.  Monteath  243 

V.  Owstou  210 

V.  Patterson  39 

V.  R.  70 

V.  Town  36 

V.  Vanderhorst  216 

Bauk  of  Batavia  v.  New  York,  etc. 
R.  68,  195,  203,  207 

48 
248 

248 

61 

207 
248 
143 
109 
107 
297 
300 
172,  237 
182 
94,  150,  152 
265 
184 


Bank  of  Beloit  v.  Bcale 
Bank  of  Genesee  v.  Patchiu 
Bank  of  New   York   v.  Bank   of 

Ohio 
Bank  of  Owensborough  v.  West- 
ern Bank 
Bank  of  Palo  Alto  v.  Pacific  Postal 

Tel.  Cable  Co. 
Bank  of  the  State  ?>.  Wheeler 
Banner  Tobacco  Co.  v.  Jenison 
Bannon  v.  Warfield 
Barber  v.  Taylor 
Bard  v.  Yohn 
P>arden  v.  Felch 
Bariiara  v.  Bell 
Baring  v.  Clark 

V.  Corrie 
Barker  v.  Furlong 

V.  St.  Louis,  etc.  R 
Barlow  v.  Congregational  Society     239, 

244 

Barnard  v.  Coffin  117,  120 

Barnes  v.  Ontario  Bk.  138,  156 

V.  Trenton  Gas  Light  Co.  1 90 

Barnctt  v.  South   London  Tram. 

Co.  180 

Barnstable,  The  288 

Baron  i'.  Husband  257 

Barrett  v.  Deere  145 

Barron  ?•.  Detroit  317 

Barrows  v.  Cushway  82 

Barry  r.  Page  236,  237 

Bartholemew  v.  Jackson  26,  94 


CASES   CITED. 


XXV 


Page 

Bartlctt  V.  Tucker 

234 

Banley  v.  Kiclitiiiyer 

369 

Barton  v.  Moss 

111 

Bartonshill  Coal  Co.  v.  Rcid 

332 

Barwick  v.  English   Joint   Stock 

Co.                       195,  199,  200 

203 

305 

Bates  V.  American  Mortgage 

Co. 

192 

V.  Pilling 

263 

V.  West  borough 

317 

Batty  V.  Carswell 

127 

146 

Baulec  v.  N.  Y.,  etc.  R. 

345 

Bawden  v.  London,  etc.  Co. 

187 

Baxter  v.  Sherman 

174 

Bayley  v.  Wilkius 

142 

Beach  v.  Ficke 

257 

Beal  V.  Soutli  Devon  Ry. 

108 

122 

Bean  v.  Pioneer  Mining  Co. 

171 

242 

Beardslee  v.  Ricliardson 

122 

Beattie  v.  Lord  Ebury 

254 

Beaufort  v.  Neeld 

137 

Beckham  v.  Drake 

237 

Beecher  v.  Venn 

142 

Belfield  v.  National  Supply  Co. 

174 

Bell  V.  Josselyn                    362, 

363 

305 

V.  McConnell 

101 

102 

Bell's  Gap  R.  R.  v.  Christy 

44 

Benjamin  v.  Dockham 

73 

Bennett  v.  Allcott 

369 

V.  Bates 

266 

V.  Davis 

28 

V.  Juilson 

201 

V.  Lathrop 

235 

Benson  v.  Liggett 

48 

Bentley  v.  Doggett              127, 

132, 

137 

Benton  v.  Pratt 

372 

V.  Trustees 

320 

Benzing  v.  Steinway 

352 

Berea  Stone  Co.  v.  Kraft    3.39, 

.343, 

344 

Berg  V.  Parsons                    275, 

278, 

279 

Bergh  v.  Warner 

73 

Bergman  v.  Hendrickson 

308 

311 

Berkeley  v.  Mardy 

37, 

258 

Berkey  c.  Judd 

238 

Bernshouse  r.  Aljbott 

173 

Berry  v.  Barnes 

142 

Betteley  v.  Reed 

112 

Bexwell  v.  Christie 

107 

Beymer  v.  Bonsall 

169 

Bibb  V.  Allen 

104 

Bickerton  v.  Rurrell 

259 

260 

Bickford  c.  :Mcuier                66, 

138 

143 

Bid  die  v.  Bond 

Bicrce  v.  Red  Bluff  Hotel  Co. 

Bigelow  V.  Livingston 


Page 
112 

187 
136 


Biggs  V.  Evans  8,  65,  218,  219 

Bi<4ley  v.  Williams  183 

Billings  V.  Mason  50 

Bird  V.  Boulter  35 

V.  Brown  58,  60 

Bittle  i>.  Camden  &  Atl.  R.  312 

Bixby  V.  Dunlap  370 

I'.  Moor  103 

Black  V.  Christchurch  Finance  Co.  277 
Blackburn  v.  Haslam  187 

V.  Scholes  78 

V.  Vigors  187 

Blackstone  v.  Butterraore  79,  89 

Blackwell  v.  Ketcham  132,  146 

Blades  v.  Free  84,  253 

Blaisdell  r.  Aheru  103 

Blake  i-.  Ferris  274,  277,  278 

V.  Lanyon  •  370 

Blakely  v.  Bennecke  234 

Blanchard  v.  Kaull  244 

Bliven  v.  Hudson  River  Rd.  Co.  1 12 
Bliss  V.  Sneath  258 

Blood  V.  French  1 53 

Blore  V.  Sutton  1 1 5 

Blumenthal  v.  Shaw  209,  358,  373 

Board  v.  Howell  36 

Bock  V.  Gorrisen  94 

Bodge  V.  Hughes  323 

Bodine  v.  Killeen  31 

Bollman  v.  Loomis  39 

Bolton  Partners  v.  Lambert  52 

Bonaparte  i'.  Wiseman  277 

Bond  V.  Evans  325,  326 

Bonito  V.  Mosquera  221 

Bonncy  v.  Morrell  155 

Bonynge  v.  Field  230 

Boorman  v.  Brown  139,  152 

Booth  V.  Mister  292 

Borchcrling  I'.  Katz  170,  237 

Borden  v.  Boardman  159 

Borries  v.  Imperial  Ottoman  Bank  173, 

174 
Boston  ?•.  Simmons  223 

Boston  Ice  Co.  v.  Potter  45,  158,  159, 
175,  260 
Boston,  etc.  R.  v.  Whitcher  250 

Boswell  V.  Barnhart  289 

V.  Cunningham  110 


XXVI 


CASES   CITED. 


Page 
Boulton  I'.  Jones  45,  158,  260 

Buurlier  v.  Macauley  224,  371,  373 

Boweu  V.  Hall  3"2 

V.  Joues  92 

Bower  L\  Teato  277 

liowlcr  (-'.  O'Connell  299 

Bowliug  Greeu  Saviugs  Bank  v. 

Todd  94 

Boyce  v.  Bank  1^0 

Bovson  V.  Thorn  372,  373 

Biacey  v.  Carter  98 

Bnukelt  v.  Luhke  274 

Bradford  i;.  Hanover  Ins.  Co.  202 

Bradish  v.  Belknap  67 

Bradlee    r.    Boston    Glass    Manu- 


factory 1 "  1 , 

Bradstreet    v.     Baker  171, 

V.  Everson 
Brady  v.  Todil  139, 

Brainerd  c.  Dunning 
Branch  v.  International ,  etc.  By. 
Brannock  v.  Elmore 
Bray  v.  Gunn  61, 

V.  Kettell 
Brazil  Coal  Co.  v.  Gaffney 
Brevig  v.  Chicago,  etc.  11.  304, 

Brice  v.  Bauer 
Briggs  r.  Partridge      170,  237,  239, 

i;.  Spaulding 
Brigham  v.  Palmer 

V.  Peters 
Bristow  ('.  Whitmore 
Briti.sh    Mutual    Banking  Co.  v. 


Charnwooil    Forest    By. 

British  Waggon  Co.  v.  Lea 
Britton  v.  Turner 
Broadbend  v.  Barlow 
Brock  V.  Jones 
Brockway  v.  Allen 

V.  Mullin 
Brodeur  v.  Valley  Falls  Co. 
Brohl  V.  Lingeman 
Bronson's  Ex'r  v.  Chappell 
Brook  V.  Hook 

r.  N.  Y.  etc.  R. 
Brookhaven  v.  Smith 
Brooks  V.  Has.sall 

V.  Jameson 

V.  New  Durham 
Brookshire  v.  Brookshire 


68, 
203, 


13/ 


244 
238 
120 
141 

46 
313 
275 
108 
236 
355 
307 
314 
251 
124 

50 
178 

50 

195, 
204 
159 
100 
225 

59 

240 

,  143 

336 

289 

66 

59 
207 

64 
139 
145 
155 

79 


Brothers  i-.  Bank 
Bronghton  r.  Silloway 
Brower  v.  Wooten 
Brown  i\  Andrew 

V.  Boston  Ice  Co. 

t-'.  Bradlee 

V.  Howard 

V.  Lally 

V.  Lent 

V.  Maxwell 

I'.  Re  i  man 

V.  Smith 
Browning  v.  Hinkle 
Bruce  r.  Reed 
Bryan  v.  Adler 
Bryant  v.  Bank 
'  V.  Flight 

V.  Moore 
Bryne 


Page 

189 

145, 153 

57 

35 

308 

230,  252,  255 

357 

145 

365 

332 

169 

141 

202 

309 

323 

135, 138 

93 

133 


Massasoit   Packing   Co.  132, 
133,  134 

Bryson  v.  Lucas  238 

Buckalew  v.  Tennessee  Coal,  etc. 


Co. 

Buckley  ;-'.  Ilumason 
Buckwalter  r.  Craig 
Buffalo    Lubricating    Oil   Co.    v 

Standard  Oil  Co. 
BuUer  v.  Harrison 
Bunker  v.  Miles 
Burdick  v.  Garrick 
Biirkinshaw  v.  Nicolls 
Burlingamec.  Brewster 
Burlington  Ins.  Co.  u.  Gibbons 
Burniesler  v.  Norris 
Bnriiham  v.  Kidwell 
Burns  v.  Pethcal 

V.  Poulsom 
Burnside  v.  Grand  Trunk  Ry. 
Bnron  v.  Denman 
Bnrrill  v.  Nahant  Bank 
Burt  (.'.  Palmer 
Burton  v.  Goodspeed 

r.  G.  H.  &  S.  R. 

V.  Great  N.  Ry. 

V.  Perry 
Busch  V.  Wilcox 
Bush  V.  Cole 

V.  Steinman 
Bussey  ?'.  Donaldson 
Butchers',  etc.  Bank  v.  Ilubbell 
Butler  V.  C,  B.  &  Q.  Ry.  Co. 


289,  335 
103 
141 


211 
2.56 

110, 115 
114 
63 
242 
144 
138 
29 
362 

298,  299 
182 

263,  366 

38 

182 

164 

281,  283 

99 

189 

201 

1.5.3,  232 

278,291 
287 
217 
178 


CASES   CITED. 


XXVll 


Page 

Butler  t'.  Dorman  138,  140,  145 

V.  Knight  78 

V.  Manhattan  Ry.  Co.  181,  184 

V.  Maples         20,  129,  131,  133, 142 

V.  Murray  75 

V.  Trice  34 

V.  TliDinpson  35 

Buttcrfiekl  v.  Ashley  370 

Butts  V.  Phelps  107 

Byington  v.  Simpson   165,  166,  170,  237 

Byrd  v.  Hughes  39 

Byrne  v.  Eastmans  Co.  352 

j;.  Kansas  City,  etc.  R.  283 


Cabot  V.  Shaw 
Cahen  v.  Piatt 
Cahokiu  v.  Rautenberg 
Cairns  r.  Page 
Calais  Steamboat  Co.  v.  Van 
Calder  v.  Dobell 
Canulen,  etc.  Co.  i\  Abbott 
Cameron  v.  New  York  Cent 
R. 

V.  Oberlin 
Campbell  v.  Cooper 

V.  Hillman 

V.  Portland  Sugar  Co. 

V.  Providence 

V.  Reeves 

V.  Smith 
Cannell  v.  Smith 
Capen  r.  Pac,  etc.  Ins.  Co 
Capp  I'.  Topham 
Capper  ;;.  R.  Co. 
Cardot  v.  Barney 
Carew  v.  Rutherford 
Carey  v.  Kochereau 
Carney  v.  Barrett 
Carnochau  v.  Gould 
Carpenter  v.  Far iis worth 

V.  German  Am.  Ins.  Co. 
Carr  v.  Clarke 

V.  Jackson 

V.  Ry.  Co. 
Carriger  v.  Whittington 
Carrol  r.  Bird 
Carroll  v.  State 

V.  Staten  Is.  R. 


Pelt 
165, 
136, 

.,  etc. 
345, 


263, 
266, 

115, 


240, 
118, 


234, 


256 
101 

255 
221 
217 
170 
146 

352 
277 
371 
264 
364 
297 
117 

39 
102 

82 
105 
343 
318 
370 
364 

74 
151 
245 
192 
369 
236 
140 
253 
358 
326 
351 


Page 

Carter  v.  Beckwith  29 

V.  Howe  Machine  Co.  210 

V.  Slocoml)  87,  89 

Cartwright  v.  Wilmerding  221,  222 

Ca.sco  Bank  v.  Keene  59 

Casco  N.  B.  i;.  Clark    239,  240,  245,  246 

Case  Mfg.  Co.  v.  Soxmau  240,  242 

Casement  v.  Brown  9 

Cass  V.  Rudele  237 

Castle  V.  Duryee  317 

V.  Noyes  104 

Caswell  V.  Cross  155 

Catlin  V.  Bell  115,  117 

Caughey  v.  Smith  370,  371 


Cave  V.  Cave 

190 

Central  of  Georgia  R.  v.  Price 

75 

Central  R.  v.  Keegan 

342 

V.  Peacock 

310 

Central  Trans.  Co.  v.  Pullnian  Car 

Co. 

72 

Chadwick  v.  Knox 

94 

Challi.<s  V.  Wylie 

361 

Chambers  v.  Baldwin                  372 

373 

V.  Seay                                        79,  89 

Chandler  v.  Coe                   165,  170 

236 

Chanoine  v.  Fowler 

57 

Chapin  v.  Holyoke,  etc.  Ass'n 

321 

Chapman  v.  Erie  Co.                   343 

352 

V.  N.  Y.  Cent.,  etc.  R. 

298 

Charles  v.  Eshleman 

32 

Chase  v.  Debolt 

250 

Chastain  v.  Bowman 

34 

Chattachoochee  Brick  Co.  v.  Bras- 

well 

355 

Cheever  v.  Pittsburgh,  etc.  R. 

147 

Chezum  v.  Kreighbaum 

8 

Chicago  &  Alton  R.  v.  May     339, 

.343, 

344 

V.  Pillsbury 

311 

V.  Sullivan 

345 

Chicago  Brick  Co.  v.  Sobkowiak 

356 

Chicago,  B.  &  Q.  R.  v.  Honey 

225 

Chicago,  etc.  R.  v.  Brackman 

304 

V.  Dickson 

312 

r.  Epperson 
r.  Kerr 
V.  Moranda 
V.  Ross 
r.  Swan 
V.  West 
China,  The 


312 

351 

334,  336,  337 

18,  342 

3.17 
307 
288 


XXVIU 


CASES   CITED. 


Page 
Chipley  v.  Atkinson  267,  372,  374 

Cliipiiian  r.  Forest  245 

Church  V.  Chicago,  etc.  "Ry.  292,  336 
Ciriacii  v.  Merchauts'  Woolen  Co.  334 
Citizens'  Street  K.  v.  Willoeby  314 

City  N.  B.  V.  Dun  199,  200,  202 

City  of  Anderson  v.  East  316 

City  of  Boston  v.  Simmons  34 

City  of  Fiudlay  v.  Pertz  49,  56,  148,  224 
City  of  Kansas  v.  Hannibal,  etc.  R.  238 
Citv  of  Richmond  r.  Long's  Adm'r 

316,  320 

Claflin  V.  Cont.  Jersey  Works  143 

i;.  Farmers',  etc.  Bk.  1 56 

V.  Lenhcim  80,  81 

Clark  V.  Clark  (63  N.  J.  L.  1)  370 

V.  Clark  (46  Conn.  586)  74 

V.  Cumming  152 

V.  Lovering  264 

r.  Randall  103,  154 

V.  Shee  217 

Clarke  v.  Courtney  258 

i;.  Tipping  112,113 

Clay  V.  People  328 

Cleg-horn  v.  N.  Y.  Cent.  &  H.  R.  R.   313 

Clerk  V.  Laurie  89 

Cleveland,  etc.  R.  v.  Jenkins  358 

Cleveland,  etc.  Railroad  Co.  v.  Wal- 

rath  285 

Clews  V.  Jamieson  53 

Clifford  V.  Burton  182 

Clougii  V.  Clough  38 

Clowdis  V.  Fresno,  etc.  Co.  314 

Clutterbuck  v.  Coffin  253 

Coal  &  Mining  v.  Clay  344 

Coates  V.  Lewis  1 73 

Cobb  V.  Columbia,  etc.  R.  313 

V.  Knapp  169,  250 

V.  Superior  Court  35 

Cockcroft  )'.  Muller  154 

Cocke  V.  Dickens  176,  258 

Cockran  v.  L-lam  115,  117 

Coddington  r.  Goddard  35 

Coe  V.  Smith  100 

V.  Wise  320 

Copgin  V.  Central  R.  Co.  283 

Coggs  V.  Bernard  122 

Cohen  V.  Dry  Dock,  etc.  R.  308 

V.  Kittell  107 

Cole  !'.  O'Brien  231 

Coles  V.  Trecothick  117 


Page 

Collen  V.  Gardner  127,  131 

V.  Wright  230,  231 

Collins  V.  Buck  94 

V.  Buckeye  State  Ins.  Co.  240 

V.  Cooper  142 

V.  Tillou  112 

Collman  v.  Mills  325 

Columbia  Bridge  Co.  v.  Geisse  179 

Colyar  v.  Taylor  123 

Combe's  Case  115 

Combs  V.  Scott  47,  51 

Comegys  v.  American  Lumber  Co.    179 

Comfort  V.  Graham  103,  234 

Commercial  Bank  v.  Armstrong        217 

V.  French  177 

V.  Norton  116 

Commercial,  etc.  Co.  v.  State  144 

Comm.  V.  Briant  327 

V.  Canal  Commissioners  35 

V.  Kelley  325 

r.  Morgan  324,  328 

V.  Nichols  325,  327 

V.  Stevens  327 

V.  Wachendorf  325,  327 

Concord  i'.  Bank  156 

Cone  I'.  Delaware,  etc.  R.  351 

Coukey  v.  Bond  110 

Conrad  v.  Ithaca  316,  317 

Consolidated  Coal  Co.  v.  Haenni       353 

V.  Seniger  287 

Consolidated  Co.  v.  Curtis  265 

Consolidated  Nat.  Bk.  r.  Pacific, 

etc.  Co.  138 

Constant  v.  University  of  Rochester  189 
Continental  Ins.  Co.  v.  Ruckman    143, 

144 

Conway  v.  111.  Cent.  R.  351 

Conwell  y.  Voorhees  317 

Cook  V.  R.  Co.  353 

V.  Tullis  60 

Cooke  V.  Eshelby  174 

V  State  Bank  156 

I".  Wilson  261 

Cooley  u.  Perrine  141 

Coombs  V.  New  Bedford  Cordage 

Co.  3.53,  355 

Coon  V.  Syracuse,  etc.  R.     332, 333,  337 
Cooper  V.  Milwaukee,  etc.  R.  333 

Cope  V.  Rowlands  103 

Copeland  v.  Mercantile  Ins.  Co.  79 

Coppen  I'.  Moore  326 


CASES   CITED. 


XXIX 


Page 
Coppiiis  V.  New  York  Cent.,  etc.  R.  341, 

34.5 
Cordes  v.  Miller  83 

Corn  foot  V.  Fowke  198,  199 

Connval  v.  Wilson  49 

Corser  v.  Paul  .59 

Costigan  v.  Mohawk  98 

Cot  hay  v.  Feuiiell  161,  164 

Couglitn-  ('.  Globe  Woolen  Co.         278 
Countess  of  Salop  v.  Crompton  361 

Coursolle  v.  Weyerhauser  28,  .55 

Cousins  V.  Hannibal,  etc.  R.       297,  313 
Couturier  v.  Hastie  121 

Covell  I'.  Hart  230 

V.  Hill  221 

Coventry  v.  Barton  105 

Covington,    etc.    Bridge    Co.    v. 

Steinbrock  277 

Cox  V.  Bruce  206 

V.  Prentice  256 

Cragie  v.  Hadley  188 

Cragin  v.  Lovell  239,  241 

Craig  V.  Charleston  317 

Craighead  v.  Peterson  135,  136 

Crain  v.  First  N.  B.  138,  139,  156 

Craker  v.  Chicago,  etc.  R.  310,  313 

Crane  v.  Gruenewald  131,  145 

Crawford  v.  Scovell  .    29 

Cream  City  Glass  Co.  v.  Fried- 
lander  251 
Cregan  v.  Marston  341 
Cribben  i-.  Deal  32,  38 
Crispin  v.  Babbitt  334,  338,  342,  343, 
344,  350 
Cromwell  v.  Benjamin  74 
Cropper  v.  Cook  103 
Crosby  v.  Hill  145,  152 
Cross  V.  Haskins  145 
Crosskey  v.  Mills  114 
Crowfoot  V.  Guruey  87,  90,  257 
Crown  V.  Orr  353,  355 
Crump  V.  lugersoU  34 
Cullen  V.  Thomson  263 
Culver  V.  Streator  317 
Cummings  v.  Chicago,  etc.  R.            285 

V.  Sargent  143 

Cummins  i\  Heald  120 

Cunningham  v.  Keardon  74 

Curran  v.  Galen  372 

Curtiu  V.  Somerset  365 

Curtis  V.  Iviley  278 


Curtis  V.  Williamson 
Cashing  v.  Rice 
Cutter  V  Gillette 
V.  Powell 


D. 


Page 

169 

223 

97,  98 

92,96,99 


Dadswell  v.  Jacobs  112,  113 

Dale  I'.  Donaldson  231 

Dalheim  v.  Lemon  289 

Daltou  V.  Irviu  98 

Daly  V.  Bank  120 

Dan  by  v.  Coutts  77 

Daniel  y.  R.  311 

V.  Swearenger  224 

D'Arcy  v.  Lyle  104 

Darrow  I'.  Home  Produce  Co.  164,  165, 

172,  173,  176 

Danghcrty  v.  Herzog  365 

Daves  v.  Southern  Pac.  Co.  361 

Davidson  v.  Donaldson  168 

V.  Goodall  370 

Davis  V.  Caldwell  74 

V.  England  241 

V.  Forbes  355,  356 

V.  Hamlin  1 10 

V.  Kobe  150 

V.  Lane  30,  84 

V.  Maxwell  101 

V.  Waterman  192 

Dawes  v.  Jackson  171 

Day  V.  Holmes  139 

Daylight  Burner  Co.  v.  Odlin  130,  139, 

141,  150 

Dayton  v.  Warne  238 

Deakin  v.  Underwood  35 

Dean  v.  Broek  364 

V.  Peel  369 

Dearborn  v.  Bowman  26 

De  Bussche  r.  Alt         36,  111,  115,  118, 

119,  120 

Deford  v.  State  275 

DeGraff  v.  New  York  Cent.,  etc.  R.    356 

Delafield  v.  Hlinois  136 

V.  Smith  95 

Delaney  v.  Rochereau         263,  264,  364 

Delano  v.  Case  124 

Delaware,   Lackawanna,   etc.  R. 

Co.  V.  W.  R.  Har.ly  284 

Demarest  v.  Barbadoes  215 


XXX 


CASES   CITED. 


Page 
Deining  v.  Terminal  Ry.  Co.  277 

Dempscy  v.  Chambers       42,  50,  52,  57, 
60,  194,  298,  300,  301 
Denney  v.  Manhattan  11.  362 

Denni3  v.  Clark  74,  369 

Denuison  v.  Sevmuiir  287 

Denver,  etc.  R.  i'.  Harris  313 

Derby  i'.  Johnson  97 

Derry  v.  Peek  190 

Despatch   Line  r.  Bellamy  Mfg. 

Co.  5.^),  143 

Devall  V.  Burbridge  108,  111 

Devendorf  v.  West  Virginia,  etc. 

Co.  241,  243 

Devinney  v.  Reynolds  238 

Devoss  I'.  Gray  33 

Dewey  i".  Union  School  Dist.  83 

DeWitt  i;.  Walton  241 

Dexter  i--.  Hall  29 

V.  Norton  83 

Dick  V.  Cooper  182 

Dickenson  i'.  Naul  261 

Dickinson  v.  Bank  87,  89 

V.  Calahan's  Adm'rs  159 

Dickson  i;.  Waldrou  321 

Die  Elbiuger  Actiengesellschaft  v. 

Clave  1 70,  236 

Dicfeiiback  v.  Stark  100,  101 

Dieringer  r.  Meyer  81 

Dingle  i'.  Hare  139,  141,  1.'30 

Distilled  Spirits,  The  186,  189 

Diversy  v.  Kellogg  141 

Dixon 'f.  Bell  368 

V.  Chicago,  etc.  R.  334,  336 

r.  Ewart  86 

Dodd  V.  Farlow  141,  1.52 

Dodge  y.  Granger  317 

V.  Hopkins  53 

Doe  V.  Gold  win  57 

r.  Walters  57 

Dolan  V.  Thomp-son  121 

Donahoe  v.  McDonald  217,  267 

Donaldson  r.  (Commissioners  319 

Donelley  v.  Popham  58 

Donivan  v.  Manhattan  Ry.  301 

Donnelly  v.  San  Francisco  Bridge 

Co.  343 

Donovan  v.  Laing  280,  283 

V.  McAlpin  318 

Dorclic^ter  Bk.  v.  New  England 

Bk.  120 


Page 

Doublcday  v.  Kres3  145 
Dougherty  v.  West  Superior  Iron 

Co.  356 

Dow  V.  Johnson  366 

Downes  v.  Harper  318 

Downey  v.  Burke  100 

V.  Low  276 

Downmau  v.  Williams  230 

Drain  v.  Doggett  146 

Dresser  i;.  Norwood  189 

Drew  r.  Nunn  29,  30,  84,  233 

Drinkwater  v.  Goodwin  150,  262 
Drummond  v.  Crane 
Drury  v.  Foster 
Ducarrey  v.  Gill 
Dugau  V.  Anderson 
Dun  V.  City  N.  B. 


Duncan  v.  Baker 

V.  Findlater 

V.  Hill 

V.  Jaudon 

i;.  Niles 
Dung  V.  Parker 
Dunlop  V.  Muuroe 
Dunn  I'.  Hall 

V.  Macdonald 
Durant  i'.  Roberts 
Durden  v.  Barnett 
Durkin  v.  Kingston  Coal  Co. 
Durnford  v.  Patterson 
Durrell  r.  Evans 
Duseiibury  v.  Ellis 
Dustan  v.  Mc Andrew 
Dutton  V.  Marsh 

V.  Willner 
Duvall  V.  Wellman 
Dwindle  r.  N.  Y.  C.  &  H.  R.  R.  285,  310 


159 

39 

171 

97 

120,  202 

100 

318 

103,  105 

190 

231 

231 

317 

209 

255 

45 

368 

287 

122 

137 

231 

75 

239 

113,  115 

39,  103 


Dyer  v.  Miuiday 
Dvett  I'.  Hvnian 


E. 


Eager  v.  Grimwood 

Eaglesfield  v.  Londonderry 

Earle  v.  Earle 

Eason  v.  S.  &  E.  T.  Ry. 

East  St.  Louis  Connecting  Ry.  i*. 

Reames 
Eastern  R.  Co.  i'.  Benedict 
Eaton  V.  New  York  Cent.,  etc.  R. 


308 
299 


369 

264 

31 

293 

313 
164 
342 


CASES   CITED. 


XXXI 


Page 

Eberts  r.  Selover  50 

Eddy  V.  Livingston  122 

Edgecombe  y.  Biickhout  85 

Edmunds  I'.    Busliell  138,  142,  143,  147 

Edwards  v.  Dillon  32 

Egglcston  V.  Boardman       116,  117,  176 

V.  Wagner  38 

Eichbaum  r.  Irons  235 

Eiglimy  v.  Union  Pac.  Ky.  319 

Eiscmau  v.  Schneider  37 

Eldridge  v.  Atlas  Steamship  Co.       355 

V.  Walker  110,  115 

Electric  Ky.  v.  Lawsou  340 

Elkhart  County  Lodge  r.  Crary  39 

Elledge  v.  Ry.  Co.  183 

Elliott  V.  Chicago,  etc.  Ry.  356 

V.  Swartwout  256 

V.  Tur(]uand  86 

Ellis  V.  Goulton  256 

V.  New  York,  etc.  R.  351 

V.  Sheffield  Gas  Consumers  Co.   275 

Elwell  I'.  Shaw  171 

Empire  Mill  Co.  r.  Lovell  182 

Engel  V.  Eureka  Club  275 

Engelhart  v.  Farraut  292,  299 

Entwisle  v.  Dent  136 

Eoff  V.  Irvine  11 1 

Episcopal  Church  u.  Wiley  113 

Ermentrout  v.  Girard,  etc.  lus.  Co.  144 

Espy  y.  Bank  156 

Estes  V.  Worth! ngtoa  362 

Evans  v.  Davidson  299,  305 

V.  Smallcombe  54 

V.  Wain  174 

V.  Walton  371 

Evansville  R.  v.  Guyton  345 

Evarts  v.  St.  Paul,  etc.  Ry.  293 

Evrit  V.  Bancroft  262 

Ewald  V.  R.  Co.  344 

Ewan  V.  Lippincott  284,  335 

Exchange  Bank  v.  Rice  159 

Exchange  N.  B.  v.  Third  N.  B.  119 

Ex  parte  Birmingham  Banking  Co.  117 

Bright  8 

Cooke  226 

Edwards  256 

Hartop  230 

Mather  104 

Snowball  86 

Sutton  1 1 6 

White  8,  227 


F. 

Page 
Factors,   etc.  Co.  v.   Maine   Dry 

Dock,  etc.  Co.  191 

P'airbanks  v.  Snow  28 

Fairchild  v.  King  1 17 

V.  McMahon  60,  201 

Fairfield  Savings  Bank  v.  Chase      189, 

191 
Fairlie  fc".  Fen  ton  213,  262 

V.  Hastings  180,  181,  182 

Fairmount  Ry.  v.  Stutler  368 

Falk  V.  Moebs  245,  248 

Farebrother  v.  Simmons  35 

Farmers',  etc.  Co.  v.  Wilson  84,  88,  253 
Farmers'  &  M.  Bank  v.  Butchers' 

&  I).  Bank  70 

Farmers',  etc.  Bank  v.  King  226 

Farmington  Sav.  Bank  r.  Buzzell     146 
Farr  v.  .John  153 

Farrel  Foundry  Co.  v.  Dart  191 

Farrington  v.  South  Boston  R.  206 

Farry  v.  Great  Northern  Ry.  309 

Farwell  v.  Boston,  etc.  R.  193,  332 

Faviell  v.  Eastern  Counties  R.  155 

Fay  V.  Winchester  136 

Fellows  V.  Hartford,  etc.  Co.        80,  81 
Felt  V.  School  Dis.  109 

Felton  V.  Harbeson  343 

Feltus  V.  Swan  364 

Fenn  t».  Harrison  127,  132 

Feoffees   of  Heriot's   Hospital  v. 

Ross  318 

Ferguson  v.  Carrington  48 

Ferrand  I'.  Bischoffslieim  175 

Fetrow  v.  Wiseman  27 

Fifth  Ave.  Bank  v.  Forty-Second 

St.,  etc.  Co.  195,  206 

Firbank's  Ex'rs  v.  Humphreys  231,  232 

Fire  Ins.  Patrol  v.  Boyd  318,  321 

First  N.  B.  v.  Cody  63,  64 

V.  Fourth  N.  B.  109 

V.  Hall  248,  259 

V.  Shaw  220,2:21 

V.  Spr.igue  120 

V.  Wall  is  246 

Fisher  v.  Drewett  96 

V.  Krutz  1 1 1 

Fiske  V.  Fnders  297 

P'itch  V.  Lewiston  Steam  Mills  Co.      38 

Fitzgerald  v.  Connecticut   Paper 

Co.  356 


xxxu 


CASES   CITED. 


Page 

Fitzhugh  1-.  Wiman  267 
Fitzmaurice  v.  Bavley  51 
Fitzsiinmons  v.  Josliu  199 
I'.  Railway  Co.  307 
Flamiagan  v.  California  N.  Bauk  156 
Fleckuer  v.  Bauk  of  U.  S.  00 
Fleet  V.  Miirton  250 
Fleming  v.  Hartford  F.  Ins.  Co.  144 
Fleniyug  v.  Hector         32,  33,  234,  235 
Fler^h  r.  Lindsay  31 
Fletcher  v.  Baltimore  and  Poto- 
mac n.  301 
V.  G.  W.  El.  Co.  20- 
1-.  llarcot  104 
Flike  V.  Boston  and  A.  R.          341,  352 
Flinn  &  Co.  v.  Hoyle  2.'36 
Flint  V.  Norwich 
Floyd  Acceptances,  The 
Flyun  V.  Messenger 


311 
137 

73 
209 
180 
248 

54 

152 

341 

164, 165 

319 


V.  Pew 
Folger  V.  Chase 
Forhes  v.  Hagman 
Forcheimer  v.  Stewart 
Ford  V.  Fitchburg  R. 

V.  Williams 
Foreman  v.  Mayor 

Fores  v.  Wilsou  370 

Forney  v.  Shipp  250 

Forsyth  v.  Day  238 

V.  Hastings  101 

Fortune  i-.  Traiuor  309 

Forward  v.  Cout.  Ins.  Co.  143 

Foster  v.  Bates  46 

V.  Smith  260 

V.  Wadsworth-IIowland  Co.        274 

Fothergill  v.  Phillips  50 

Fowler  r.  Callan  103 

Fowles  V.  Bowen  357 

Fowlkes  V.  Baker  74 

Fo.x  V.  Chicago,  etc.  Ry.  Co.  76 

V.  Peninsular  Lead  Works  341,352 

V.  Stevens  369 

Fradley  v.  Hyland  163,  169 

Fraker  v.  St.  Paul,  etc.  R.  333 

Frank  r.  Jenkins  48 

Frankland  v.  Johnson  240,  244 

Franklin  v.  R.  Co.  351 
Franklin  Bank  Note  Co.  v.  Mackey    130 

Frazier  i;.  Erie  Bank  227 

Freeman  v.  Cooke  131 


Page 
Freeman  r.  Glens  Falls  Paper  Mill 

Co.  355 

u.  Robinson  74 

V.  Roslier  51 

Freeman's  Bauk  r.  National  Tube 

Works  217 

French  v.  CresswcU  307 

Frenkel  v.  Hudson  190 

Friedlander  v.  Ry.  68,69,  195,  202,  203, 
204,  206 
Frink  v.  Roe  88,  136,  141 

Frith  V.  Cartland  225 

Frixioue  v.  Tagliaferro  95 

Frothingham  v.  Everton  107 

Fruc  i:  Loriug  227 

Fry  V.  Lockwood  256 

Fuller  V.  Hooper  258 

y.  Jewett  341,344 

V.  Wilson  199 

Fulton  Mills  v.  Wilson  348 

Furmau  i'.  Van  Sise  369 


G. 

Gabriel.sou  v.  Waydell 
Gadd  V.  Houghton 
Gaetano  &  Maria,  The 
Gagnon  v.  Uana 
Gaither  v.  Myrick 
Gardiner  v.  Davis 
Gardner  v.  Allen 

V.  Gardner 

V.  Ogden 
Garland  i'.  Dover 
Garner  v.  Maiigam 
Garratt  v.  Cullum 
Garrey  i'.  Stadler 
Garth  v.  Howard 
Gaussen  v.  Morton 
Geisingcr  v.  Beyl 
Gelatt  V.  Ridge 
George  v.  Clagett 

V.  Gobey 
Georgia  R.  v.  Newsome 
Gcrli  ('.  Poidebard  Silk 
German  Fire  Ins.  Co.  i'. 
Gibbs  V.  Baltimore,  etc. 
Gibson  v.  Soper 

V.  Winter 
Gihon  V.  Stanton 


Mfg.  Co. 
Grunett 
Co. 


157 

230,  252 

157 

280 

75 
261 
173 

38 
113 
248 
201 
162 

93 
180 
87,89 
111 
61,  95 
173 
323 
312 
101 
142 
103 

29 

258,  262 

121 


Gilbert  v.  Holmes 

V.  How  33, 

V.  Scliwenck 
Gill  V.  Bickncll 

V.  Middlcton 
Gillespie  v.  Lincoln 
Gillett  V.  reppercurne 

V.  Whiting 
Gilley  v,  Gilley 
Gilson  V.  Collins 
Glaspie  v.  Keator 
Glavin  v.  Rhode  Island  Hospital 
Glencoe  Land,  etc.  Co.  v.  Commis- 
sion Co. 
Goddard  v.  Grand  Trunk  R. 
Godman  v.  Meixsel 
Godshaw  v.  Struck 
Godwin  v.  Francis 
Gooch  V.  Association 
Goodenow  v.  Tyler 
Goodspeed  v.  East  Haddam  Bank 


90, 
147, 


Goodwin  v.  Bowden 

V.  Roberts 
Gordon  v.  Brewster 

V.  Bulkeley 

V.  Potter 
Gorman  v.  Gross 

V.  Smith 
Goss  V.  Stevens 
Gould  V.  Norfolk  Lead  Co. 
Governors,  etc.  r.  Meredith 
Grady  v.  American  Cent.  Ins.  Co. 
Grafton  N.  B.  v.  Wing  242, 

Graham  v.  St.  Charles  St.  Ry.     209, 
Grammar  v.  Nixon 
Grand  Trunk  Ry.  v.  Latham 
Grant  v   Beard  42,  60, 

V.  Norway 

t'.  Ry. 
Grapel  v.  Hodges 
Graves  v.  Horton 
Gray  v.  Agnew  219, 

V.  Durland 

V.  Ilaig 
Great  N.  Ry.  v.  Kasischke 
Great  W.  Ry.  v.  Willis 
Green  v.  Elgie 

V.  Gilbert 

V.  Kopke 

V.  Maitland 


112, 


181 


Page 

79 

1,35 

368 

35 

122 

317 

110 

49 

74 

361 

224 

319 

372 
314 
103 
75 
233 
319 
150 
211, 
310 
257 
216 
97 
37 
74 
276 
9 
55 
179 
317 
116 
248 
374 
198 
301 
230 
206 
54 
84 
127 
222 
369 
113 
3.54 
182 
266 
99 
236 
112 


CITED. 

XXXlll 

Page 

Green  v.  Mules 

9 

2,  96 

V.  New  River  Co. 

361 

Greenberg  v.  Whitcomb   Lum 

ber 

Co. 

361 

Greenfield  Bank  v.  Crafts 

59 

Greenfield  Sav.  Bk   v.  Simons 

110 

Greenlief  v.  Moody 

150 

Greenwood,   etc.  Co.  v.   Georgia 

Hume  Ins.  Co. 

110 

Greer  v.  Louisville,  etc.  R. 

340 

Gribben  i'.  Maxwell 

29 

Grice  v.  Kenrick 

262 

Griffiths  V.  Earl  of  Dudley 

346 

349 

V.  Wolfram 

361 

Griggs  V.  Swift 

80,  86 

Grimes  v.  Young 

308 

Grinnell  v.  Wells 

369 

Grinton  v.  Strong 

7 

Grist  r.  Backhouse 

176 

258 

Griswold  i'.  Gebbie 

201 

V.  Haven 

195 

Grojan  v.  Wade 

176 

Groover  v.  Warfield 

262 

Grund  v.  Van  Vleck 

44 

Guelich  v.  National  State  Bank 

120 

Guerreiro  v.  Peile 

141 

150 

Gulf,  etc.  Ry.  v.  Kirkbride 

301 

Gulick  V.  Grover 

130 

,131 

Gundlach  v.  Fischer 

77 

Gunn  V.  Roberts 

157 

Gurley  v.  Armstead 

266 

Gutlirie  v.  Armstrong 

35 

Guy  Mannering,  The 

287 

Gwilliam  v.  Twist                  76, 

291, 

292 

H. 


Haas  I'.  Balcli 

356 

V.  Damon 

113 

Iladley  v.  Ileywood 

371 

Ilagedorn  v.  Oliverson 

43,46 

Ilager  i".  Rice 

247 

Haines  v.  Pohlmann 

145 

V.  Schultz 

313 

Hall  V.  Crandall 

231 

V.  Finch 

25,  26 

V.  Hollander 

368 

V.  Lauderdale 

232,  254 

r.  Storrs 

109 

Halley,  The 

287 

XXXIV 


CASES   CITED. 


Page 

Ilalliday  v.  Nat.  Tel.  Co.  274 

V.  Stuart  IJ'T 
Ilaluptzok  V.  Great  Northern  Ry. 

Co.                                   36,40,  118,  291 

Hamilton  v.  Love  98 

Hamlin  v.  A  bell  263,  264 

V.  Sears  -14 

Hammond  i'.  Ilannin  56 

Hancock  v.  Hodg.son  237 

Hancock  Bank  v.  Joy  243 

Hand  V.  Clearfield  Coal  Co.  98 

V.  Cole  19 

Hanford  v.  McNair  37,  5.^) 

Hankius  v.  New  York,  etc.  R.  341,  343 

Hannon  v.  Siegel-Cooper  Co.  196,  296 

Hardy  v.  Shedden  Co.  280,  282 

r   Waters  28 

Harlan  v.  Ely  109,  141 

Harley  v.  Buffalo,  etc.  Co.  351 

Harper  v.  Little  84 

V.  Tiffin  N.  B.  169,  172 

Harralson  y.  Stein  118 

Harrigan  v.  Welch  261 
Harrimau  v.  Stowe  184,  364,  365 
Churchward 


Harrington 
V.  Gies 
Harris  v.  Johnston 
V.  Simmermau 
V.  Truman 
Harrison  v.  Collins 

I'.  Grady 
Harsant  r.  Blaine 
Hart  V.  Aid  ridge 
V.  Ten  Eyck 
Hartai<  v.  Ribbons 
Hartfield  v.  Roper 
Hartford  Ins.  Co.  v.  Farrish 
Hartley's  Appeal 
Hartwig  v.  Bay  State,  etc.  Co, 
Harvey  v.  Merrill 

v.'n.  Co. 
Haskell  v.  Starl)ird 
Haskins  v.  Royster 
Hastings  v.  Dollarhide 
Hasty  V.  Sears 
Hatch  V.  Ferguson 
V.  Squires 
V.  Taylor 
Hathaway  v.  Johnson 
Haven  r\  Brown 
Haver  v.  Central  R. 


235 

55 

138 

264 

236, 252 

59 

111,224 

108 


95 

98 

135 

145 

226 

9 

73 

113 

370 

113 

105 

5 

144 

79 

288 

105 

343 

68,  201 

224,  370 

28 

280,  284 

191 

178 

131,133,134 

200 

81 

310 


Page 

Hawk  V.  Garman  289 

Ihiwke  c.  Cole  32,45 

lluwkius  I'.  McGroarty  56 

V.  Kockford  Ins.  Co.  144 

Ilawley  v.  Keeler  35 

f.  Northern  Central  R.  354 

Ilawtavne  v.  Bourne  143 

Hayes  "f.  Willio  105 

Hays  I'.  McConnell  93 

Hazard  v.  Spears  108 

V.  Tread  well  15 

Hazeltiue  v.  Miller  131 

Head  V.  Porter  366 

Heald  v.  Ken  worthy  167 

Healoy  v.  Lotlirop  321 

Hearns  v.  Waterbury  Hospital  319,320 

Heath  v.  Go.slin 

V.  Nutter 

V.  Paul 

Iledden  v.  Griffin 

Heffron  v.  Pollard 

Hefner  v.  Vandolah 

Ilegenmyer  v.  Marks 

Heineman  v.  Heard 

Ilempfling  i-.  Burr  264 

Henderson  v.  Ford  85 

V.  McNally  174 

V.  Mayhew  162 

Henry  v.  Heeb  59 

Hen.son  v.  Hampton  100 

lleutz  V.  Miller  218 

Herd  V.  Bank  of  Buffalo  45 

Hermes  v.  Cliicago,  etc.  Ry.  184 

Hern  ('.  Nichols  15,198 

Herring  I'.  Hoppock  299 

V.  Skaggs  140,  141 

Hertzog  i;.  Ilertzog  26,  93 

Hess  V.  Rau  87,  89,  90 

Hewett  V.  Swift  266,  300 

Ilewlet  V.  George  289 

Hexamer  v.  Webb  274 

Hevu  !-.  O'llagen  49 

Ileys  r.  Tiudall  108 

Hihbard  v.  Peek  139 

Hihhlcwhite  V.  McMorine  37,  38 

Hicks  y.  Burhans  26,94 

Ilierny.  Mill  187 

Iliggins  V.  Moore         138,  140,  145,  152 

r.  Senior  165,  251,  252 

V.  Watcrvliet  Turnpike  Co.        306 

V.  W.  U.  Tel.  Co.  279,  284 


CASES  CITED. 


XXXV 


nilbery  v.  Ilatton  52,  57 

Hill  V.  Boston  316 

i;.  Caverly  365 

V.  Morey  293 

V.  North  187 

V.  Wand  66 

Hilts  V.  Chicago,  etc.  R.  345 

Hinckley  ;;.  Arey  110 

V.  Southgate  36 

Hines  v.  Charlotte  316 

HirshfieUl  v.  Waldron  145 

Hissong  V.  Richmond,  etc.  Ry.  349 

Hitchcock  V.  Buclhinan  245 

Hobhouse  v.  Hamilton  250 

Hoboken    Printing,    etc.    Co.    l'. 

Kahn  210 

Hobson  V.  Hassett  241 

Hochester  v.  De  la  Tour  97 

Hodgson  V.  Dexter  171,  238,  255 

Hoffman  v.  Carow  265 

V.  U.  Co.  303,  304,  306 

Hogan  V.  Shorb  174 

V.  Smith  352 

Hogg  V.  Snaith  136 

Holbrook  v.  Chamberlin  55,  56 
Holden   v.  New   York  and    Erie 

Bank  188 

Holding  V.  Elliott  230 

Hole  V.  Sittingbourne  R.  Co.  276 

Holland  v.  Russell  256 

Hoiliday  v.  St.  Leonard's  320 

Hollins  V.  Fowler  265 

Hollis  V.  Wells  370 

Hollman  i;.  Pullin  234,  260 

Holman  v.  Frost  215 

Holmes  v.  Lucas  Co.  215 

Holt  V.  Ely  262 

Home  Machine  Co.  v.  Ballweg  145 
Homer  Ramsdell  Transportation 
Co.  V.  La  Compagnie  Generale 

Transatlantique  288 

Honncr  v.  111.,  etc.  R.  3.33 

Hood  V.  Keeve  180 

Hoover  v.  Wise  191 

Hopkins  v.  Mehaffy  254 

V.  MoUinieux  34 

V.  Oxley  Stave  Co.  374 

Hoppe  V.  Savior  233 

Horiord  v.  Wilson  96 

Horgan  v.  Pacific  Mills  369 

Horn  V.  Cole  63 


Horn  V.  Western  Land  Ass'n 
Hornby  v.  Lacy 
Horr  V.  Barker 
Horton  v.  McCarty 
Hough  V.  Texas,  etc.  R. 
Houghton  V.  First  Nat.  Bk. 

V.  Matthews 
Houldsworth  v.  Glasgow  Bank 


98 

121,  172 

222 

35 

356 

248 

1.50 

199, 

203 

Housatonic  Bk.  v.  Martin  191 

Houseman  v.  Girard,  etc.  Ass'n         189 

Hoverson  v.  Noker  289 

Hovey  v.  Hobson  29 

Howard  v.  Baillie  135 

V.  Chapman  151 

V.  Crowther  370 

V.  Daly  96,  97,  98 

i;.  Duncan  59 

I".  Patent  Ivory  Co.  44 

V.  Sheward  139 

V.  Worcester  317 

Howard's  Case  1 1 7 

Howe  V.  Keeler  38 

V.  Newmarch  306 

Howe  Machine  Co.  v.  Clark  178 

Howell  V.  Batt  257 

V.  Caryl  155 

V.  Gordon  87 

V.  Graff  134 

Howland  v.  Woodruff  221 

Hubbard  v.  Tenbrook         142,  143,  164, 

166 
Hubbell  V.  Denison  156 

Hudson  V.  Granger  174 

V.  Randolph  190 

Huff  V.  Ford  10,  281 

Hughes  V.  Graeme  233 

V.  Wamsutta  Mills  85,  86,  99 

Ilughson  V.  Richmond,  etc.  R.  R.      335 
II  111  but  V.  Marshall  31 

Humble  v.  Hunter      159,  165,  175,  176, 

259 

Hun  V.  Gary  124,  125 

Hundley  r.  Louisville,  etc.  R.  358 

Hnuu  V.  Michigan,  etc.  R.  343 

Hunt  V.  Douglass  117 

V.  Great  N.  Ry.  357 

r.  Rousmanier  79,  84,  88,  89 

V.  Wotton  369 

Hunter  v.  Giddings  259 

Huntington  v.  Knox  164,  165,  172 


XXXVl 


CASES   CITED. 


Page 
135, 
137 
94 
210 
371 
146 
317 
250 
100 
250 
332 
236 
186 
321 


Huntley  v.  Mathias      67,  127,  130, 

Hurlbert  v.  Bringli.im 
Hiissey  v.  Norfolk,  etc.  R. 
llutcheson  v.  Peck 
IIutcliin<;s  I'.  Munger 
Hutcliiiis  I'.  Brackett 
Hutchinson  v.  Tatham 

i:  Wetmore 

V.  Wheeler 

V.  York 
Hutton  u.  Bulloch  170, 

Hyatt  i;.  Clark  47,  48,  51, 

Hyde  v.  Cooper 


I. 


Illinois  Cent.  R.  v.  King  303 
V.  Latham                              300,  307 

Hliuois  Steel  Co.  v.  Mann  356 

Ilsley  I'.  Merriam  174 

Imperial  Loan  Co.  v.  Stone  29 
Indianapolis   Chair  Mfg.   Co.   v. 

Swift  179 

Indianapolis,  etc.  Ry.  v.  Tyng  199 

V.  Morris  75 

V.  Watson  356 

lunerarity  i-.  Merchants'  Nat.  Bk.  190, 

191 

In  re  Broomhead  94 
Consort    Deep   Level   Gold 

Mines  65 

Cunningham                       138,  147 

D'Angibau  34 

Day  1 54 

Hannan's,  etc.  Co.  89 

London,  etc.  Bk.  99 
North  Australian  Territory 

Co.  115 
Northumberland       Avenue 

Hotel  Co.  44 
Portuguese,  etc.  Mines  52 
Succession  of  Lanaux  84 
Insurance  Co.  v.  Davis  87 
International,  etc.  Ry.  v.  Ander- 
son 304 
Ireland  r.  Livingston                   130,  136 
Ironwood  Stove  Co.  v.  Harrison  54 
Irvine  v.  Grady  187 
V.  Union  Bank  58 


Page 

Irvine  v.  Watson  168 

Irwin  V.  Reeves  Pulley  Co.  120 

i;.  Williar  39,  103 

Isaacs  i;.  Third  Ave.  Railroad  Co.    306, 

310 
Isberg  V.  Bowdea  258 

Isham  V.  Burgett  236 

V.  Post  122 


J. 


Jackson  v.  Ilopperton 

V.  Mutual  Benefit  Life  Ins.  Co. 


358 

145, 

146 

V.  Nat.  Bk.    138,  139,  146,  147,  216 

James  ;;.  Allen  County  97 

V.  Bixby  252 

V.  O'Driscoll  26 

V.  Rickiiell  155 

V.  Russell  65 

Janes  v.  Citizens'  Bank  240 


Jansen  v.  McCahill 

38 

Jefferson  v.  Asch 

159 

Jeffrey  v.  Bigelow 

182 

200 

Jeffries  v.  Ins.  Co. 

35 

Jenkins  v.  Bacon 

123 

V.  Hutchinson 

231 

Jennings  v.  Lvons 

99 

Jetley  ('.  11  ill' 

130 

Jett  I'.  Hempstead 

113 

114 

JiLson  V.  Gilbert 

37 

Joel  V.  Morison 

297 

V.  Woman's  Hospital 

319 

Johanson  v.  Pioneer  Fuel  Co. 

308 

Jolmson  V.  Armstrong 

250 

r.  Barber 

362 

365 

V.  Buck 

153 

V.  Dodge 

37 

V.  Hurley                 67,  12C 

,  130, 

140 

V.  Johnson's  Adm'r 

84 

V.  Lindsay 

335 

I'.  Martin 

361 

V.  Nat.  Bank 

343 

r.  Richmond,  etc.  Ry. 

348 

V.  Sumner 

73 

Johnston  v.  Milwaukee,  etc. 

Co. 

127, 
129 

Jones  V.  Adler 

96 

I'.  Atkinson 

50,  59 

V.  Avery 

19 

CASES   CITED. 


XIXVll 


Page 

Jones  V.  Blocker  370 

v.  Corporation  of  Liverpool        281 

V.  Hope  45 

V.  Jackson  247 

V.  Littledale  230,  251 

V.  Pliipps  142 

V.  St.  Louis  S.  W.  Ry.  335 

V.  Scullard  281,  282 

Jordan  i'.  Norton  127 

V.  Wright  74 

Joseph  V.  Kuox  261 

Josephs  V,  Pebrer  103 

Joslin  V.  Grand  Uapids  Ice  Co.  281 

Jossehn  v.  McAllister  61 

Judkius  I'.  Walker  101 


K. 


Kaare  (;.  1  roy  bteel  Co. 
Kalteubach  v.  Lewis 

357 
174 

Kariiak,  Tlie 

157 

Kaulback  v.  Churchill 

170 

236 

Kausal  v.  Minnesota,  etc.  Ins. 

Co. 

144 

Kayton  v.  Barnett 

162 

166 

Kean  c.  Davis 

240 

244 

Kearley  v.  Tonga 

325 

Keating  v.  Hyde 

39 

V.  R. 

307 

Keator  v.  St.  John 

224 

Keay  v.  Fenwick 

33,95 

Keefe  i;.  Sholl 

200 

Keeuan  v.  Southworth 

317 

Keene  v.  Sage 

257 

Kehler  v.  Schwenk 

355 

Keidan  v.  Winegar 

240 

Keighley  v.  Durant         45 

46 

160, 

213 

Kelley  v.  Davis 

74 

V.  Newburyport  Horse  R. 

4' 

\  51 

Kelly  V.  Metropolitan  Ry. 

364 

V.  Thuey 

176, 

235 

Kelner  v.  Baxter 

44, 

234 

Kendall  v.  Hamilton 

169 

Kennedy  v.  Green 

186 

V.  McKay 

200 

V.  Ryall 

365 

Kent  I'.  Bornstein 

262 

V.  Quicksilver  Milling 

Co 

50 

Kenton  Ins.  Co.  v.  McClellan 

30 

Keokuk  Falls  Imp.  Co.  v. 

Kings- 

land,  etc.  Co. 

240 

Kerfoot  v.  Ilyman 
Kershaw  v.  Kelsey 
Kotcham  v.  Newman 
Kiersted  v.  \i.  R.  Co. 
Kiewert  i'.  Hiudskopf 
Kilgour  V.  Finlyson 
Kimball  v.  Billings 
Kindig  v.  March 
King  V.  Batterson 
V.  Longnor 
V.  New  York  Central, 
V.  Sparks 
Kiugsley  v.  Davis 

V.  Siebrecht 
Kinsey  v.  Leggett 
Kirkpatrick  v.  Stainer 
Kirk's  Appeal 
Kirkstall  Brewery  Co.  v. 
Ry. 

Kline  v.  Bank 

Knapp  V.  Alvord 
V.  Simon 

KnatciibuU  v.  Hallett 

Knight  V.  Clark 

Knisley  v.  Pratt 

Knowles  v.  BuUene 

Knox  V.  Flack 

Komorowski  v.  Krumdick 

Kosminsky  v.  Goldberg 

Kozel  I'.  Dearlove 

Krantz  v.  R. 

Kreiter  v.  Nichols 

Kroeger  v.  Pitcairn 

Krumm  v.  Beach 

Krutz  V.  Fisher 


Page 

110,  113 

33,  86 

275,  300 

237 

112 

138 

265 

90 

176 

38 

etc.  R.  9 

146 

169 

165 

221 

170,  236 

155 

Furness 

182 

240 

88,  89 

169 

225 

238,  255 

353,  355 

309 

28 

142 

290 

56 

310 

323 

230,  231 

201 

111 


Lacy  V.  Getman  84,  159 

La  Farge  v.  Kneeland  256 

Lafferty  f.  Jelly  113 

Laflin,  etc.  Co.  v.  Sinsheimer  246 

Laing  v.  Butler  169 

Lakeman  v.  Pollard  83 

Lake  Shore,  etc.  R.  v.  Prentice         313 
Lake  Shore,  etc.  Ry.  Co.  v.  Spang- 

ler  348 

Lamm  v.  Port  Deposit,  etc.  Ass'n 

180,202 


xxxvm 


CASES   CITED. 


Page 

Page 

Lamothe  v.  St.  Louis,  etc 

Co. 

80,  82 

Lewis  V.  Ramsdale 

135 

Liiinpley  v.  Scott 

122 

V.  Read 

51 

Laucaster   v.    Kuickerbocker 

Ice 

V.  Samuel 

103 

Co. 

237 

V.  Tilton 

234 

Lane  v.  Black 

60 

Lewson  v.  Kirk 

361 

V.  Cotton 

263 

317 

362 

Libby  v.  Schennan 

355 

V.  Pere  Marquette  Boom  Co. 

213 

Lickbarrow  v.  Mason 

8 

Langan  v.  Great  W.  Hy. 

76 

Liddell  v.  Cliidester 

96 

Langhoru  v.  Allnut 

179 

Liebscher  v.  Kraus 

240 

242 

Laiiing  v.  N.  Y,  Cent.,  etc 

.  R. 

252 

,256 

Lilly  V.  Smales 

232 

,  254 

Larkin  v.  Ilapgood 

256 

Limpus  V.  Loudon  General  Omni- 

La Rue  v.  Goezinger 

117, 

159 

bus  Co. 

306 

Laubheim  v.  DeK.  N.  S. 

::o. 

284 

Linuehan  v.  Rollins 

9,  274 

,  278 

Laugher  v.  Poiuter 

281 

Linneinan  v.  Moross 

159 

Laussatt  v.  Lijjpincott 

118 

Lipe  V.  Eiseulerd 

369 

Laverty  v.  Snethen 

107 

117 

Lister  v.  Stubbs 

227 

Law  I'.  Stokes 

141 

145 

Little  (;.  Fosset 

267 

Lawrence  v.  Fox 

159 

V.  Gallus 

111 

V.  Gullifer 

98 

V.  Hackett 

280 

V.  McArter 

28 

Little  Miami  Railroad  Co.  v. 

Fitz- 

V.  Shipmau         9,  274 

,  275 

,276 

,279 

patrick 

344 

Lawton  v.  Waite 

361 

Little  Miami  R.  i;.  Stepheus 

334, 

338, 

Lawyer  v.  Fritcher 

369, 

370 

371 

339 

Leadbitter  t;.  Farrow 

239 

V.  Wetmore 

311 

Leatherberry  i-.  Odell 

98 

Little  Rock,  etc.  Ry. 

V.  Eubanks 

348 

Lebanon  Savings  Bank  v. 

Hollen- 

Lockwood  V.  Levick 

96 

beck 

189 

London,  etc.  Ass'n  v. 

Kelk 

54 

Lee  V.  Fontaine 

50 

London  Stock  Hank 

'.  Simmons 

216 

V.  Lord 

301 

Long  V.  Colburn 

241 

V.  Mathews 

263 

V.  Hart  well 

37 

V.  Munroe 

135 

V.  Millar 

230 

V.  Percival 

242 

V.  Thayer 

84 

253 

V.  Walker 

108 

V.  Tribune  Printing  Co. 

209 

Lehow  V.  Simonton 

160 

Loomis  t'.  New  York 

etc.  R. 

183 

Leigiiton  v.  Sargent 

108 

V.  Simpson 

115 

117 

Lennard  v.  Robinson 

252 

Lorentz  v.  Robinson 

350 

Leopold  I'.  Salkey 

86 

Louis  V.  Smellie 

111 

Lerned  v.  Johns 

165 

Louisville,  etc.  R.  v. 

Collins 

340 

Le  Roy  v.  Beard 

135, 

138, 

141 

Louisville,  etc.  R.  Co 

V.  Orr 

348 

Leu  V.  Mayer 

179 

Love  ('.  Miller 

96 

Leuthold  v.  Fairchild 

2«5 

Lovell  V.  Howell 

332 

Levi  r.  Booth 

66, 

140, 

219 

Lowenstein  v.  Lombard 

142 

Levitt  V.  Ilaniblet 

140, 

166 

Luby  V.  Hudson  Riv. 

R. 

183 

Levy  V.  Barnard 

94 

Lucas  V.  Bank 

32 

V.  Spencer 

102 

V.  De  la  Cour 

259 

Lewis  V.  Atlas,  etc.  Ins.  Co. 

81 

Lucey  v.  Ingram 

287 

V.  Brehme 

121 

Luckie  r.  Johnson 

145 

V.  Duane 

155 

Lucy  V.  Ry. 

311 

V.  Ins.  Co. 

99 

Ludgater  v.  Love 

198 

199 

V.  Long  Island  R. 

280 

Ludwig  V.  Gillespie 

261 

V.  Nicholson 

231 

Lufkin  V.  Mayall 

101 

CASES  CITED. 


XXXIX 


Lumley  v.  Gye 


Page 

209,  224,  370,  371, 

372 

Lupton  V.  White  113 

Lyell  V.  Kennedy  46,  48 

L}ueh  V.  Fallon  102 

V.  Met.,  etc.  R.  210 

Lyon  V.  Kent  34 

V.  Mitchell  102 

i;.  Tollock  136 


M. 


Maauss  v.  Henderson  235 

McArthur  v.  Times  Printing  Co.         44 
MacBeath  v.  Ellis  78 

Macbeath  u.  Haldiniaud  25.5 

McCauley  f.  Brown  8,218 

McCaulIey  v.  Jenuey  254 

McClay  v.  Hedge  100 

Maclean  v.  Dunn  56 

McClellan  v.  Reynolds  255 

McCliutock  V.  South  I'enn.  Oil  Co.     53 
McCoUin  V.  Gilpin  252 

McConnell  v.  East  Point  Land  Co.    177 
McCord  V,  Western  Union   Tel. 

Co.  207, 208 

McCormick  v.  Joseph  189 

McCracken  v.  San  Francisco  42,  53,  56, 

60 
McCrarv  v.  Ruddick  26,  93 

McCready  i'.  Thorn  74,  138,  157 

McCuUoiigh  V.  Moss  143 

McCurdy  i-.  Rogers  231 

MeCutcheon  v.  People  326 

McDaniels  v.  Flower  Brook  Mfg. 

Co.  170,238 

McDonald  v.  Maltz  102 

V.     Massachusetts      General 

Hospital  319 

McDowell  r.  Laer  160 

V.  Simpson  56 

McElrath  v.  United  States  215 

McGilvray  v.  West  End  Ry.  310 

McGraft  v.  Rugee  94 

MacGregor  v.  Gardner  79 

Machine  Co.  i-.  Insurance  Co.  143 

Mclllhcnny  f.  Wilmington  317 

Mtlnerney  r.  D.  &  II.  Canal  Co.       283 
Mc  In  tyre  i-.  Park  56 

Mclutyre  v.  Trumbull  318 


Page 

Mackall  i'.  Rachford  373 

Mackay  v.  Comnierciul  Bank  199 

McKensey  v.  Edwards  244 

McKeuzie  v.  British  Linen  Co.  59 

V.  Nevius  94 

McKindly  v.  Dunham  145 

McLaren  v.  Hall  54 

McLeod  V.  Evans  225 

McManus  v.  Crickett  16,  306 

M'Namee  v.  Hunt  278 

McNaughton  i-.  Moore  84 

McNeil    V.    Boston   Chamber  of 

Commerce  36 
!;.  Tenth  N.B.  217 
McNeilly  v.  Continental  Life  Ins.  Co.  80 
McNevins  v.  Lowe  122 
McNutt  V.  Livingston  318 
M'Peck  V.  Central  Vt.  R.  354 
McPherson  r.  Cox  155 
McTaggart  v.  Eastman's  Co.  337 
Mad  River,  etc.  R.  v.  Barber  333 
Madden  v.  Jacobs  83 
Maddox  v.  Brown  297 
Maddux  v.  Bevan  155 
Madison  R.  v.  Bacon  333 
Mahoney  i'.  Dore  353,  354,  355 
Maier  v.  Randolph  300,  302 
Maiseubacker  y.  Society  Concordia  313 
Maitland  v.  Martin  103,  104 
Makepeace  i;.  Rogers  114 
Malcolm  v.  Scott  257 
Mali  V.  Lord  309 
Mallach  v.  Ridley  309 
Mallory  v.  Mariner  146 
Mallough  V.  Barber  109 
Malouey  v.  Bartley  266 
Mandeville  t'.  Welch  114 
Manhattan  Life  Ins.  Co.  r.  Forty- 
second  Street,  etc.  R.  185,  206 
Mann  v.  Delaware  &  H.  C.  Co.  345 
Manning  v.  Uogan  352 
I'.  Wells  74 
Manson  v.  Baillie  93 
Mapler.  R.  Co.  169 
Mare  v.  Charles  246 
Marfield  v.  Goodhue  107 
Margarite  Mitchell,  The  79 
Maria,  The  287 
Markey  v.  County  of  Queens  315 
Markham  v.  Jaudon  152 
Marquette,  etc.  R.  v.  Taft  75 


xl 


CASES   CITED. 


Page 

Marscball  v.  Aiken  63 

Maisli  V.  Hand  ^ 

V.  llerinau  352 

V.  J  elf  153 

Martiu  i'.  Almond  238 

v.  Famsworlli  156 

V.  Great  FaUs  Mfg.  Co.              127 

r.  Louisville,  etc.  li.                     361 

V.  Moultou  110 

V.  Payue  369 

V.  Pope  94 

I'.  Schoenberger  100 

V.  Teinperley  287 

V.  Webb  65 

Martiui  v.  Coles  150,  222 

Marviu  v.  Brooks  7,  1 14 

V.  Ellwood  1 12 

Mason  v.  Joseph  116 

V.  Richmond,  etc.  R.            340,  356 

V.  Waite  217 

Massey  v.  Banner  113 

r."Tavlor  98 

Mather  r.'Rillston  341,  352 

Matlu'son  v.  Kilburn  45 

Matter  of  GoodcU  1 54 

Matthews   v.   Dubuque  Mattress 


Co. 
V.  Menedger 
Matthiessen,    etc.     Co. 

Mahon's  Adm'r 
Mattison  v.  L.  S.  &  M.  S. 
May  V.  Bliss 
Maver  i'.  Dean 


240,  242 
94 
V.     Mc- 

30,  84 

Ry.     358 

298,  300,  302 

198 


V.  Hutchinson  Building  Co.       364, 
365 
Mayor  v.  Eschbach  135 

Mayor,  etc.  of  Salford  v.  Lever  34,  115, 
148,  223,  224 
Means  v.  Swormstedt  242 

Mechanics'  Bank  v.  Bank  of  Co- 
lumbia 156,  245,  248 


51 

232 

276 

243 

146 

143 

69, 

155, 156 

Merchants'  N.  B.  v.  Goodman  120 

Merrick  v.  Wagner  146 


Meehan  v.  Forrester 

Meek  v.  Wendt 

Meier  v.  Morgan 

Mclledge  I'.  B().ston  Iron  Co. 

Melvin  v.  Lamar  Ins.  Co. 

Mentz  V.  Lancaster  F.  Ins.  Co. 

Merchants'  Bank  v.  State  Bank 


169, 


46,  240, 


232, 


Merrill  v.  Kenyou 

i;.  Wilsun 

V.  Witherby 
Merritt  v.  Merritt 
Mersey  Docks  v.  Gil)bs 
Metcalf  V.  McLaughlin 

V.  Williams 
Meyer  i;.  Ilanchett 

V.  111.  Cent.  R. 

V.  Ry. 

V.  Stone 
Michael  v.  Jones 

V.  Stanley 
Michaelson  v.  Denison 
Michoud  V.  Girod 
Mildred  v.  Maspous 
Milford  V.  Water  Co. 
Mill  V.  Hawker 
Miller  i;.  Goddard 

V.  Lea 

r.  Minnesota  &  Northwestern 

V.  New  York,  etc.  li. 

f.  Phoenix  Ins.  Co. 

V.  R.  R.  Co, 

V.  Roach 

I'.  State  Bank  of  Duluth 
Mills  V.  Mills 

Millville,  etc.  Ins.  Co.  i;.  Mechan- 
ics', etc.  Ass'n 
Minett  v.  Forrester 
Minnesota,  etc.  Co.  v.  Montague 
Minturu  v.  Main 
Misa  V.  Currie 

Missouri  Pac.  R.  v.  Williams 
Mitchell  V.  Crassweller 

V.  Harmon}' 
Mitcluim  V.  Dunlap 
Mobile,  etc.  R.  r.  Clauton 

V.  Godfrey 

V.  Jay 
Moffatt  V.  Batemaa 
Mobr  V.  Miesen 
Moir  V.  Hopkins 
Molcy  V.  Brine 
Monsseaux  v.  Urquhart 
Montagu  v.  Forwood 
Montaignac  v.  Sliitta 
Monticello  i\  Kendall 
Montreal  Assurance  Co.  v.  M'Gil 
livray 


362 


343, 


104, 

298,300, 


Page 
170 

235 
84 
320 
266 
241 
110 
339 
311 
145 
254 
356 
357 
110 
174 
58 
263 
100 
174 

283 
9 
143 
224 
242 
261 
39 

143 

86 

136 

262 

94 

340 

297 

306 

178 

361 

344 

50 

122 

105 

302 

28 

33 

173 

206 

255 

128 


CASES   CITED. 


xli 


Montross  v.  Eddy 

Moon  V.  Kicliinond,  etc.  R. 

Moore  v.  Appletou 

V.  Fitchburg  11. 

V.  Fox 

V.  McKiiiney 

V.  Penn 

V.  Robinson 

V.  Shields 

V.  Stone 

V.  Railroad 
Moores  r.  Citizens'  Nat.  Bk. 
Moors  V.  Kidder 
Morau  v.  Dawes 


Page 
102 
338 
104 
266 
37 
318 
177 
267 
256 
77 
340 
204,  206 
221 
369 


V.  l)un})liy 
Morgan  r.  East 
V.  Railroad 
V.  Smith 
V.  Vale  of  Neath  R. 


372,  373,  374 

153 

63 

9 

332 


Morier  v.  St.  Paul,  etc.  R.  298,  305 

Morris  v.  Ckasby  121 

I'.  Preston  216 

V.  Salberg  155 

Morse  v.  Conn.  Riv.  R.  182 

V.  State  327 

Mortimore  v.  Wright  74 

Morton  v.  Met.  Ins.  Co.  211 

Moses  V.  Bierliug  96 

V.  Stevens  101 

Moss  V.  Livingston  246 

Motley  V.  Head  84 

Mott  V.  Consumers'  Ice  Co.  306 

Moulton  I'.  Bowker  139,  154 

Mudgett  V.  Day  146 

Mullens  v.  Miller  137 

Muller  V.  Podir  94 

Mulligan  I'.  N.  Y.  &  R.  B.  Ry.  210, 
299,  308,  309 

Mullins  V.  Collins  325,  326 

Mulvehall  i-.  Millward  369 

Mulvehill  v.  Bates  297 

Mundorff  r.  Wickersham  50 

Muiin  V.  Commission  Co.  131,  132 

Murphy  v.  New  York,  etc.  R.  337 

Murray  v.  Dwiglit  281,  335 

V.  South    Carolina    Railroad 

Company  332 

V.  Usher  362,  364 

Muscott  V.  Stubbs  26 

Mussey  v.  Becchor  136 

V.  Eagle  Bank  156 


Page 
Mussey  v.  Scott  170,  237 

Mutual  B.   L.  Ins.  Co.  v.  Robi- 

sou  144 

Mutual  Life  Ins.  Co.  v.  Hunt  29 

Myerlioff  v.  Daniels  201 


N. 

Nagle  V.  McFeeters  94 

Naltner  v.  Dolan  113 

Narramore  v.  Cleveland,  etc.  Ry.     355, 

357 
Nash  V.  Mitchell  30 

Nat.  Bank  v.  Ins.  Co.  225,  226,  227 

National    Bank   of   Commerce   v. 

Chicago,  etc.  R.  207 

National  Cordage  Co.  v.  Sims  8,  122 
National  Exchange  Co.  v.  Drew  199 
Nat.  Life  Ins.  Co.  i;.  Minch  60,  190 

National  Protective  Ass'n  v.  Cum- 

ming  372 

Nave  V.  First  Nat.  Bk.  177,  248 

Neal  V.  Patten  179 

Neilsou  V.  James  109 

Nelson  v.  Aldrich  141,  153 

V.  Cowing  182 

V.  Powell  162 

Nelson    Business   College  Co.   v. 

Lloyd  308 

Neufeld  v.  Beidler  254 

Newall  V.  Tomlinson  256 

Newberry  r.  Wall  35 

Newboldy.  Wright  219,  222 

Newconib  v.  Boston  Protective  De- 
partment 321 
Newell  V.  Borden  33 

i>.  Smith  116 

New  England  R.  Co.  v.  Conroy  338,  342 
Newman  v.  Sylvester  254 

New  Market  Savings  Bank  v.  Gillet  244 
New  Orleans,  etc.  R.  v.  Norwood  283 
N.  Y.,  etc.  Ins.  Co.  v.  Ins.  Co.  110 

New  York,  etc.  R.  t'.  Lambright        342 

V.  Schaffer  358 

New  York  Iron  Mine  v.  Citizens' 

B.ank  146 

V.  First  N.  B.  138,  143,  147 

New  York,  L.  E.  &  W.  R.  i-.  Stein- 

brenner  280 

N.  Y.  Life  Ins.  Co.  v.  Statham  87 


xlii 


CASES   CITED. 


Page 
New  York  &  N.  II.  R.  r.  Schnyler 

195^  205,  206 
New  York  Security  &  Trust  Co.  v. 

IJpmuu  220 

New  Zealand,  etc.  Co.  v.  Watson       119 

247 

177',  248 

39 

317 

112 

67,  129 

Boys' 

60,  298,  301 

334,  340 

217,  218 

137,  146 

343 

266 

326 

371 

110 


Nichulls  r.  Diaiuoud 
Nichols  V.  Frothiiigham 

V.  Mudgett 
Nicholson  c.  Mouiicey 
Nickolson  v.  Knowles 
Nickson  v.  Brohan 
Nims    V.    Mouut    Ilerniou 

School 
Nix  V.  Texas,  etc.  R. 
Nixon  V.  Brown 

V.  Palmer 

I'.  Selby,  etc.  Co. 
Nobel's  Exp,  Co.  v.  Jones 
Noecker  v.  People- 
Noice  V.  Brown 
Nolte  !.•.  Ilulhert 
Nord  Dcutscher,  etc.  Co.  v.  Inge- 

bregsten  341 

Norfolk  V.  Worthy  172 

Norrington  v.  Wright  101 

Noriis  V.  Kohler  296 

North  River  Bank  t;.  Aymar  136 

Northern  Pac.  R.  v.  Babcock  3.')6 

V.  Ilainbly  336 

V.  Herbert  342 

V.  Mares  354 

Northwestern    Distilling    Co.    v. 

Brant  171 

Norton  v.  Herron  252 

Norwalk  Gaslight  Co.  v.  Norwalk    275, 

277 
Noyes  V.  Laudon  1 1 1 

i;.  Loring  231,  232 


o. 


Oakes  v.  Cattaraugus  Water  Co.   44,  234 


V.  Ma.se 

337 

O'Brien  v.  Cunard  Steamship  Co. 

285 

Oceanic,   etc.   Nav.   Co.   v.   Com- 

pania,  etc.  Es])anola 

361 

O'Conner  v.  Insurance  Co. 

179 

O'Connor  v.  C'lopton 

256 

Odiorne  c.  Maxcy 

147 

Oelricks  v.  Ford 

236 

Ogden  V.  Ilall 

Page 
252 

Ogles  by  V.  Yeglesias 

251 

Ohio,  etc.  Ry.  i;.  Stein 

184 

Okell  V.  Charles 

247 

Olcott  V.  Tioga  R.  R.  Co. 

245 

O'Leary  v.  Manjuctte 

317 

Oliver  V.  Court 

no 

Olyphant  i'.  McNair 

142 

O'Maley  v.  South  Boston  Gasli 

ght 

Co. 

353 

354 

355 

O'Neil  I'.  Behanna 

373 

Oom  V.  Bruce 

262 

Opie  V.  Serrill 

123 

Orton  V.  Scofield 

no 

Osborn  i'.  Gillett 

368 

Osborne  v.  Knox 

336 

V.  Morgan 

264 

361 

Oskanip  v.  Gadsden 

182 

Owen  V.  Cronk 

256 

257 

V.  Gooch 

230 

Owings  V.  Hull 

52 

Owsley  V.  Montgomery,  etc 

.  R. 

2n 

I'.  Pliilips 

59 

Oxford  V.  Crow 

55 

Pack  i;.  White 

Packet  Co.  v.  Clough 

Padniore  v.  Piltz 

Padwick  v.  Stanley 

Page  V.  Wells 

Paice  V.  Walker 

Paige  I'.  Stone 

Pain  u.  Sample 

Painton  v.  Northern  Cent.  R. 

Palk  V.  Force 

Palmer  v.  Delaware  &  II.  C.  Co. 

V.  Hatch 

V.  Haverhill 
Palmeri  v.  Manhattan  Ry.  210,  299,308 
Panama,  etc.  Co.  v.  India  Rubber 

Co. 
Papc  r.  Westacott 
Parcell  v.  McComber 
Park  V.  N.  Y.  Cent.,  etc.  R 
Parker  v.  Brancker 

V.  Hill 

V.  McKeuna 

V.  Smith 


244 

183 

157 

95,  114 

108,109,361 
252 
235 
235 
351 
103 
351 
141 
93 


224 
107 
100 
352 
150 
38 

n5 

66 


107 


CASES   CITED. 


xliii 


Page 
Parker  v.  Winlow  252 
Parks  V.  Ross  255 
Parsons  v.  Wiuchell  266 
Parton  v.  Crofts  152 
Partridge  v.  White  48 
Patersou  v.  Gaudasequi  169,  235 
Patrick  v.  Bowman  234 
Patten  v.  Kea  297 
Patterson  v.  Lippiucott           28,  53,  233 
V.  Tash  219,  222 
Pattisou  V.  Jones  357 
Paul  V.  Hummel  289 
Paxton  Cattle   Co.   v.   First  Na- 
tional Bank  44 
Payne  I'.  Lecoufield  141,  153 
V.  Potter  141 
Peabody  v.  Hoard  131 
Peak  u.  Ellicott  225 
Pearson  v.  Graham  86 
Peck  V.  Harriott  135 
Peebles  v.  Patapsco  Guano  Co.  200 
Peel  V.  Shepherd  173 
Peeples  v.  Ry.  310 
Peine  u.  Webster  55 
Pelham  v.  Hildcr  139 
Penfold  V.  Warner  135,  136 
Peninsular  R.  c.  Gary  75 
Pennsylvania  Co.  v.  McCaffrey  352 
V.  Roy  285 
Pennsylvania  R.  v.  Zink  356 
Pentz  V.  Stanton           169,  172,  241,  249 
People  V.  Clay  210 
V.  Denison  54 
V.  Globe  Ins.  Co.  86 
V.  Roby  325 
V.  Township  Bk.  110 
Perkins  r.  Boothby  143,  147 
V.  Evans  223 
V.  Smith  362 
Perminter  v.  Kelly  33,  265 
Perry  r.  Lansing  338 
Peters  v.  Farnsworth  141 
Peterson  v.  W.  U.  Tel.  Co.  209 
Petor  V.  Hague  182 
Petril,  The  337 
Phelin  v.  Kenderdiue  369 
Phelps  I'.  James  182 
V.  Sullivan  39 
V.  Wait                          267,  362,  365 
Philadelpiiia,  etc.  R.  v.  Cowell      42,  49 
V.  Howard  171 


Page 

Philadelphia,  etc.  R.  v.  Larkin  314 

y.  Quigley  210,310 
Philadelphia  and  Reading  R.  v. 

lyoThy                                  123,  305,  307 
Phillips  y.  Barnctt  290 
V.  Mercantile  Nat.  Bk.  203,  207 
V.  Muir  136,  150 
Pliilpot  V.  Bingham  28 
Phcenix  Ins.  Co.  v.  Munger  143 
Pickard  v.  Sears  63,  64 
I'ickering  v.  Busk       8,  15,  66,  130,  217, 
218   222 
Pickert  v.  Marston               139,  141,  152 
Pickett  V.  Pearsons  61 
Pierce  v.  Johnson  249 
Pike  V.  Balch  75 
V.  Douglass  48 
V.  Ongley  250,  252 
Pinkham  v.  Crocker  139,  150 
Pitney  v.  Glen's  Falls  Ins.  Co.  143 
Pittman  v.  Sofley  190 
Pitts  V.  Mower  172 
Pittsburg,  etc.  R.  v.  Gazzam  45 
V.  Pillow  311 
V.  Shields  311 
V.  Sullivan  284 
Plant  V.  Thompson  151 
V.  Woods  372 
Poillon  V.  Secor  62 
Pole  V.  Leask         16,  129,  132,  136,   137 
Polhill  V.  AV alter  232 
Pollacek  v.  SchoU  174 
Pollard  V.  Gibbs  38,  55 
V.  Vinton  202,  206 
Pollock  I'.  Cohen  58 
V.  Stables  139 
Poulton  V.  London,  etc.  Ry.  210 
Pow  V.  Davis  232,  233 
Powell  V.  Construction  Co.  283 
I'.  Oleson  165 
Power  c.  First  N.  B.  119 
Powers  i\  Briggs  244 
I'.  Ma.«s.   Homoeopathic  Hos- 
pital 319 
V.  New  York  R.  353,  354 
Powles  I'.  Page  191 
Prather  v.  United  States  326 
Prentice  Co.  v.  Page  221 
Preston  v.  Hill  155 
V.  Prather  123 
Prestwich  v.  Poley  155 


xliv 


CASES   CITED. 


Page 

Price  V.  Taylor  239,  242 

Prickett  i;.  Badper  96 

Priestley  v.  Feruie  169 

V.  Fowler  332 

Prins  Hendrik,  The  287 

Pritchard  v.  Hitchcock  301 

Probst  V.  Delainater  351 

Proctor  V.  Bennis  131 

Prosser  v.  Coots  318 
Protection  Life  Ins.  Co.  v.  Foote        31 

Providence  v.  Miller  25.7 

Purdy     V.    Rome,    etc.  Railroad 

Company  349 

Putnam  v.  French  141, 145 

D.  R.  Co.  311 


Q. 

Quarman  v.  Burnett  281 

Queen  i'.  Parr  99 

V.  Stephens  328 

Quiiilan  v.  Providence,  etc.  Co.  144 
Quinn  v.  Complete  Electric  Const. 

Co.  10 
V.  Power                                 297.  305 

V.  R.  284 


R. 

Rabone  v.  Williams  1  "3 

Ragan  v.  Chenault  56 

Ragon  V.  Toledo  R.  353 

Ragsdale  v.  Laud  Co.  9 

Railroad  i'.  Spence  340 

Raisin  I'.  Clark  110 

Raleigh  v.  Atkinson  87,  88 

Ralli  V.  Troop  288 

Ramazotti  v.  Howring  173 

Randall  v.  Kehlor  150 

RandcU  v.  Trimen  232,  233 

Rathbun  i-.  Snow  65,  147 

Ray  V.  Powers  32 

Rayuer  v.  Grote  259,  200 

Re  Devala  Provident,  etc.  Co.  179 

National  Coffee  Palace  Co.  232 

Pickering's  Claim  170 

Read  v.  Anderson  87,  90,  104 
V.  East  Providence  Fire  Dist.     279 

V.  Legard  74 


Page 

Reagan  v.  Casey 

281 

Rechtscherd    i;.    Accommodat 

ion 

Bank 

107 

361 

Reddie  v.  Scoolt 

370 

Redgrave  v.  Hard 

196 

Reece  v.  Kyle 

103 

Reed  v.  Home  Savings 

Bank 

210 

309 

Recdie  v.  London  &  N. 

W.  Ry 

278 

Rees  I'.  Pellow 

80 

Reese  v.  Medlock 

136 

Reeve  v.  First  N.  B. 

171, 

240 

242 

Reg.  V.  Cooper 

210 

I'.  HoUirook 

328 

V.  Huntley 

361 

Rendell  v.  Harriman 

239 

,242 

Renshaw  v.  Creditors 

89 

Renwick  v.  Bancroft 

116 

Reuben  v.  Swigart 

276 

Rex  i;.  Almon 

328 

V.  Dixon 

326 

V.  Gutch 

210 

328 

i;.  Medley 

328 

V.  Walter 

210 

328 

Reynolds  v.  Peapes 

236 

Hhoades  v.  Blackiston 

261 

Kiioda  V.  Anuis 

201 

Rhodes  v.  For  wood 

99 

Rice  V.  Gove 

179 

V.  Manley 

209 

372 

V.  Peninsular  Club 

147 

r.  Wood 

102 

V.  Yocum 

265 

Rice,  etc.  Co.  v.  Bank 

174 

Richardson   v.   Carbon 

Hill  Coal 

Co. 

285 

319 

V.  Eagle  Machine  Works 

97 

V.  Kimball 

61 

Richmond,  etc.  R.  v.  Norment 

356 

i:  Williams 

334 

Ricks  17.  Yates 

99 

Riddle  v.  Backus 

37 

liiehl  V.  Evansville  Foundry  Ass'n 

226 

Right  V.  Cuthell 

58 

Rimell  v.  Sampayo 

130 

Ripley  v.  Chipnian 

100 

Rippe  V.  Stogdill 

114 

Risbourg  v.  Bruckner 

61 

Ritchie  v.  Waller 

297 

305 

Roach  V.  Turk 

265 

Robb  V.  Green 

111 

Roberts  v.  Johnson 

266 

CASES   CITED. 


xlv 


Roberts  )•.  N.  W.  Nat.  Ins.  Co. 

V.  Ogilby  24, 

V.  K.  Co'. 

V.  Hock  bottom 
Robertson  v.  Cloud 

V.  Levy 

V.  Sichel 
Robins  V.  Bridge 
Robinson  r.  Bird 

V.  Davison 

V.  Kanawha  Valley  Bank     243 

V.  Mullett  '  111, 

V.  Rohr 

V.  K utter 

V.  Webb 
Robson  V.  Drummond  117, 

Roca  ('.  Byrne 
Rochester  Lantern  Co.  v.  Stiles 

Rockford,  etc.  R.  i'.  Sage 
Rodick  V.  Coburn 
Roehm  v.  Ilorst 
Roesner  v.  Herman 
Roger  V.  BlaokwcU 
Roland  v.  Coleman 
Roosevelt  v.  Doherty 
Rossiter  v.  Rossiter 

V.  Trafalgar  Life  Assurance 
Co. 
Rounds  V.  Delaware,  etc.  II.      300, 

Rourke  v.   White   Moss   Colliery 
Co.  280, 

Rower.  Rand  80,84,201, 

Royal  Ins.  Co.  v.  Beatty 

Royce  v.  Allen 

Rudasill  v.  Falls 

Rudd  V.  Matthews 

Rudgeair  i-.  Reading  Traction  Co. 

Ruffner  v.  Hewitt 

Ruggles  V.  American  Central  Ins. 
Co. 

Rumsey  v.  Briggs 

Rnpp  V.  Sampson 

Rnss  V.  Wabash  W.  Ry. 

Russell  V  Hankcy 

r.  Hudson  Riv.  R.  Co. 
V.  Lawton 
r.  Slade 

Rust  r.  Katon 

Rutland,  etc.  R.  v.  Lincoln 


Page 

179 

,  112 

344 

37 

80 

146 

317 

230 

26.5 

8.5 

,247 

,  139 

317 

2G2 

267 

,  159 

225 

117, 

159 

44 

141 

97 

348 

29 

88 

174 

132 

116 
30G, 
307 

283 

262 

49 

249 

50 

59 

308 

103 

143 
243 

no 

340 
109 
334 
318 

37 
127 

48 


Ryan  v.  Cumberland  R. 
V.  Tudor 


Page 
332,  .•J34 
146,  192 


Sadler  v.  Henlock  274 

V.  Leigh  172,  260,  261 
Sage  V.  Shepard  &  Morse  Lumber 

Co.  221 
St.   Andrew's  Bay  Land   Co.   i». 

Mitchell  31 
St.  Johnsbury,  etc.  R.  Co.  v.  Hunt 

224,  368 

St.  Louis,  etc.  R.  v.  Larned  207 

V.  Weaver  182 

V.  Youley  278 

St.    Margaret's   Burial   Board    v. 

Thompson  116 

Salacia,  The  252 

Saladin  v.  Mitchell  152 

Salomons  i-.  Pender  102 

Salter  v.  Howard  371 

Saltus  17.  Everett  216 

Samo  V.  Ins.  Co.  152 

Samuelian  r.  American  Tool  Co.  284 

Sanborn  v.  Ncal  255 

Sanders  v.  Partridge  237 

Sands  v.  Child  263 

Sanger  v.  Warren  171 

Sargeant  v.  Clark  155 

Sar<,'ent  v.  Mathewson  370 

Satterfield  v.  Malone  189 

Saunderson  v.  Griffith  45 

Savage  i-.  Gibbs  255 

V.  Waltliew  361 
Saveland  v.  Green  49,  104 
Savings    Eund    Soc.    v.   Savings 

Bank  130 

Saxton  V.  Hawksworth  353 

Sayre  »'.  Nichols  116 

Scaiilan  v.  Keith  242 

Schendel  v.  Stevenson  166 

Scliip  I'.  Pabst  Brewing  Co.  275 

Schlater  v.  Winpenny  80 
Schm.^ltz  v.  Avery    '  163,  176,  259,  200 

School  District  v.  JEtna  Ins.  Co.  54 
Schultz  r.  Griffin                          138,  141 

Scidmore  r   Smith  370 
Scott   V.   Central   Park,   etc.    R. 

308,  311 


xlvi 


CASES   CITED. 


Page 

Page 

Scott  r.  Maier 

2 

5,  93 

Simpson  v.  Lamb 

99 

i\  Surinan 

162 

226 

V.  Walby 

119 

Scribner  v.  Collar 

102 

Sims  V.  Miller 

1.50 

V.  Flagg  Mfg.  Co. 

37 

Singer  Mfg.  Co.  v.  Rab 

n 

P,  19 

274 

Scrimshire  v.  AUlcrton 

164 

Sioux  Citv,  etc.  R.  v. 

First  Nat. 

Scully  r.  Sully's  K.x'r 

93 

Bk. 

207 

Scagar  v.  Slingerlaiid 

370 

Skiff  V.  Stoddard 

139 

152 

Seaman  v.  Kocliler 

338 

Skipper  v.  Clifton  Mfg 

C 

3. 

313 

Scarle  v.  Parke 

300 

Slater  v.  Jewett 

343 

352 

Sebeck  v.  Plattdeutsche  Volkfest 

Slater  Woolen  Co.  i".  Lamb 

31 

Verein 

275 

Slawson  i\  Loring 

245 

246 

Secord  v.  Ry. 

284 

Sleatli  V.  Wilson 

297 

Secretary  of  State  for  India  v. 

Ka- 

Sloan  t;.  Central  Iowa  Ry. 

Co. 

76 

machee  Boye  Saliaba 

366 

Small  V.  Attwood 

131 

Seeberger  v.  McCormick 

231 

232 

Smalley  v.  Morris 

182 

201 

Seiple  V.  Irwin 

130 

138 

Smart  v.  Sanders 

87,88 

150 

Semenza  v.  Brinsley 

174 

Smith  V.  Backus 

356 

Seton  V.  Slade 

78 

V.  Bailey 

196 

296 

Sevier  v.  Birmingham,  etc. 

R. 

75 

V.  Baker 

354 

355 

Seymour  i'.  Cummins 

317 

V.  Benick 

278 

V.  Greenwood 

306 

V.  Binder 

256 

Shack  V.  Anthony 

176 

258 

V.  Clews 

140 

218 

Shafer  v.  Phtt'nix  Ins.  Co. 

189 

V.  Cologan 

59 

Sliarman  v.  Brandt 

259 

V.  Hodson 

50 

Siiarp  V.  Jones 

213 

V.  Kelly 

256 

Shaver  v.  Penn.  Co. 

349 

V.  Kerr 

38 

Shearer  v.  Evans 

267 

r.  Kidd 

146 

Shcehan  v.  R.  Co. 

343 

V.  Lane 

80 

Sheffer  i'.  Montgomery 

227 

V.  Leveaux 

95 

Shcthold  V.  Watson 

171 

V.  Lyons 

262 

Sheldon  v.  Cox 

186 

V.  McGuire 

140 

V.  Darling 

246 

V.  New  York,  etc. 

R. 

(19 

N. 

Shelton  v.  Johnson 

93 

Y.  127) 

337 

V.  Springett 

74 

V.  N.  Y.  Cent.  &  H. 

R 

R. 

(78 

Shcpard  v.  Slierin 

256 

Hun,  524) 

312 

Sherman  v.  Rochester,  etc. 

R. 

334 

V.  Oxford  Iron  Co. 

341, 

343 

Sherrod  v.  Langdou 

62 

V.  Price 

109 

Sliorwood  V.  Stone 

121 

V.  Rice 

141 

Shiells  V.  Blackburne 

122 

r.  Sleap 

256 

Shisler  v.  Vandike 

59 

V.  Sorby 

148, 

224 

Shoe  Co.  V.  Saxey 

372 

V.  Steele 

288, 

335 

Short  V.  Millard 

77 

102 

V.  Tracy 

141 

152 

Shuey  v.  United  States 

80 

V.  Utley 

366 

Sibbald  i;.  Bethlehem  Iron  Co 

151 

V.  Water  Comm. 

191 

Simmonds  i;.  Moses 

231 

232 

V.  Webster 

200 

Simmons  «.   London  Joint 

Stock 

Smout  V.  Ilbery 

232 

,234 

2.53 

Bank 

147 

Sucll  V.  Pells 

112 

Simon  v.  Brown 

65 

Snow  V.  Ilix 

254 

V.  Motivos 

249 

Rnowdon  v.  Davis 

256 

Simonds  r.  Heard 

255 

Soltau  V.  Gerdau 

221 

Simpson  v.  Garlaud 

244 

Somerville  v.  Hawkins 

357 

CASES   CITED. 


xlvii 


Pa(!fe 
Songhegan  Nat.  Bk.  v.  Boardman  247 
South  Heiirt,  etc.  Co.   i;.  Dakota, 

etc    Ins.  Co.  143 

Soiulicote  L'.  Stanley  361 

Suutliernc  v.  Howe  15,  67 

Southwell  I).  Bowtlitch  230,  250 

Spacknian  c.  Evans  54 

Spalding  v.  Kosa  85 


Sparks  v.  Dispatch  Trausfei 

•Co. 

171, 
241 

Spittle  V.  Lavender 

61 

,  230 

Spofford  V.  Ilohhs 

55 

Spooner  r.  Browning 

129 

,  130 

Spragne  r.  Gillett 

142 

Spraiglits  r.  Hawley 

265 

Spurr  V.  Cass 

172 

Stables  V.  Eley 

296 

Stiigg  V.  Elliott 

137 

Staiushy  c  Frazer's  Co. 

44 

Standard  Oil  Co.  v.  Gilbert 

81 

Stanford  v.  McGill 

97 

Stanley  v.  Schwalby 

366 

Stanton  v.  Embrey 

103 

Staples  V.  Schmid 

210 

308 

Stark  V.  Parker 

100 

State  V.  Fredericks 

200 

V.  McCance 

325 

327 

V.  j\Iason 

328 

V.  Moore 

318 

Steam])oat  Co.  v.  Joliffe 

72 

Stearns  v.  Doe 

138 

Stebbins  v.  "Walker 

173 

175 

Steele  Smith  Grocery  Co.  v. 

Pott- 

hast 

169 

Stephens,  The  John  G. 

288 

Stephenson  r.  Southern  Pac. 

Co. 

313 

Stevens  i'.  Fitch 

215 

V.  Lndiura 

64,  65 

V.  Midland  R. 

267 

V.  Wilson 

221 

Stevenson  v.  Mortimer 

215, 

262 

Stewart  v.  Brooklyn,  etc.  R. 

310 

V.  Kennett 

57 

V.  Stone 

83 

V.  Woodward 

143 

Stier  I'.  Ins.  Co. 

89 

Stiles  r.  Western  R. 

182 

Stillwcll  V.  Stajiles 

52 

Stimson  v.  Whitney 

63 

Stinchfield  v.  Little 

171, 

238 

Stoddart  v.  Key 

82 

307 


Stone  V.  Cartwright 

V.  Hills 
Storer  v.  Eaton 
Storey  v.  Ashtoa 
Stout  V.  Ennis 
Stowell  V.  Eldred 
Stranahan  v.  Coit 
Strasser  i-.  Conklin 
Strauss  v.  City  of  Louisville 

V.  Francis 

V.  Meertief 
Street  Ky.  v.  Bolton 
Strong  V.  High 
Stuart  v.  Simpson 
Stubbing  V,  Heintz 
Sturdivant  v.  Hull 
Suart  r.  Haigh 
Suit  V.  Woodhall 
Sullivan  v.  Miss.,  etc.  R. 

V.  Shailer 
Sumner  v.  Conant 

i\  Conhaim 

r.  Reicheniker 
Sutherland  v.  Ingalls 

V.  Troy,  etc.  R. 

V.  Wyer 

Sutton  V.  Spectacle  Makers  Com- 
pany 
Svenson  v.  Atlantic  Mail  Steam- 
ship Co. 
Swan  V.  Nesmith 
Swazey  v.  Union  IVIfg.  Co. 
Sweeney  v.  Berlin,  etc.  Co. 
Sweeting  v.  Pearce 
Swentzel  v.  Penn.  Bank 
Swift  V.  Jewsbury 
Swim  V.  Wilson 
Swinarton  v.  Le  Boutillier 
Swire  v.  Francis 
Sydnor  v.  Hurd 
Sykes  v.  Howarth 


Page 
365 
297 
108,  111 
297 


39 
237 
311 

48 

278 

127, 139 

96,  98 

293 

109 

370 

127 

239,  242 

231 

187 

333 

176 

31 

97 

81,  98 

321 

345 

98 


39 


296,  338 

121 

76 

353,  356 
139 
124 

263,  264 
265 
301 
199 
252 
309 


Taft  V.  Brewster 
Tags  ^'-  Bowman 
Taititor  r.  Prendergast 
Talbot  V.  Bowen 

V.  National  Bank 
Talcott  V,  Chew 


170,  238 

114 

164, 172,  173 

34 

215 

150 


xlviii 


CASES  CITED. 


Page 

Talcott  V.  Wabash  R.  1 72 

Tulmai^e  v.  Hierliause  140 

Tauiiatt  I'.  Hocky  Mt.  Nat.  Bk.  i>41 

Tapliii  17.  Florence  88 

Tarrant  v.  Welib  3.32 

Tarry  v.  Ashtun  278 

Tasker  v.  Slieplierd  84 

Tatam  i-.  Reeve  104 

Tate  V.  Ilyslop  187 

Taussig  V.  Hart  34,  110 

Taylor  i:  Brewer  93 

V.  Conner  55 

r.  Green  198 

I'.  Nostrand  232 

r.  Plumer  226 

V.  RoljinsoD  58,  60 

V.  Starkey  141 

Teedf.  Beere  114 

Temperton  i'.  Russell  224,  372 

Tetnple  i-.  Pomroy                143,  146,  147 

Tenant  1-.  Elliott  113 

Terre  Haute,  etc.  R.  v.  McMurray      75 

V.  StockwcU  75 

Terrill  v.  Rankin  366 

Terry  v.  Birmingham  N.  Bk.  102 

Tewk.sbury  v.  Spruance  34,  110 

Texas  &  P.  Ry.  v.  Scoville  313 

Thacker  v.  Hardy  87,  104 

Thayer  v.  Meeker  179 

Thomas  v.  Atkinson  169 

V.  City  N.  B.  48 

V.  Joslin  38 

Thompson  v.  Barnum  216 

V.  Havelock  110 

V.  Kelly  153,  262 

V.  Lowell,  etc.  Ry.  277 

Thomson  v.  Davenport        166,  167,  235 

Thome  i-.  Deas        27,  40,  122,  360,  363 

Thorold  V.  Smith  145 

Thorpe  v.  N.  Y.  C.  &  II.  R.  R.  285 

Tier  I'.  Lampson  80,  82 

Tifft  r.  Tifft  289 

Tillicr  I'.  Whitehead  32 

Timberlake  v.  Thayer  100 

Timjipon  v.  Allen  65 

To.id  V.  Emly  33,  235 

Toledo,  etc.  Ry.  i\  Harmon  312 

I'.  Mylott  75 

Tome  I'.  Parkersburg  Branch  R.       200 

Tool  Co.  V.  Norris  102 

Topham  v.  Braddick  114 


Pago 
Towle  V.  Dresser  28 

I'.  Leavitt  133,  141 

Townsend  v.  Corning  53 

Townsley  v.  Bankers'  Life  Ins.  Co.  Ill 
Trainer  v.  Morisou  145 

V.  Trumbull  72 

Traveller'  Ins.  Co.  v.  Edwards  65 

Traver  f.  Garlingtou  241,243 

Trentor  v.  Potiien  190 

Trickett  v.  Tomilson  127 

Triggs  V.  Jones  61,  95 

Tri.st  V.  Child  39,  102 

Trueblood  v.  Traeblood  28,  54,  55 

Trueman  v.  Loder  81 

Trust  Co.  i;.  Floyd  231,  232 

Tubbs  i;.  Dwelling  Ilou.se  Ins.  Co.  144 
Tucker  v.  St.  Louis,  etc.  Ry.  75 

V.  Taylor  94 

Tucker  Mfg.  Co.  v.  Fairbanks   240,  242, 

246 
Turner  v.  Goldsmith  83 

Turnpike  Co.  v.  Green  309 

Turpin  v.  Bilton  109 

Tuttle  I".  Swett  36 

Tweddle  v.  Atkinson  159 


u. 


Udell  V.  Atherton  195,  199,  200 

Ulilman  v.  N.  Y.  Life  Ins.  Co.  7 

United  States  v.  Bartlett  215 

V.  Buchanan  139 

V.  Dempsey  215 

V.  Grossmayer  33,  86 

V.  Jarvis  98 

V.  Parmele  164 

I".  Pinovcr  256 

United  States  Bank  i'.  Burson  145 

V.  Davis  191 

V.  Lyman  177,  258 

United  States  Tel.  Co.  v.  Gilder- 
sleeve  261 
Union  Bank  i>.  Campbell  191 
Union,  etc.  Bk.  v.  Gille.«|)ie  226 
Union  Canal  Co.  ;•.  Loyd  191 
Union    Gold  Min.    Co.    r.    Rocky 

Mt.  N.  B.  191 

Union  Mut.  Ins.  Co.  v.  Wilkinson  144 
Union  N.  B.  v.  German  Ins.  Co.  187 
Union  Pacific  Ry.  v.  Artist        319,  320 


CASES  CITED. 


xlix 


Union  Pacific  Ry.  v.  Doyle  334,  338,  339 

V.  Erickson  336 

Updike  V.  Ten  Broeck  37 

Upton  V.  Arclier  39 

i;.  Suffolk  County  Mills       137,  141 


V. 

Van  Men  v.  Am.  Nat.  Bk.  225 

Van  Antwerp  v.  Liuton  364 

Van  Arman  v.  Byington  25,  93 

Vance  v.  Erie  H.  211 

Van  Deusen  v.  Sweet  29 
Van  Tassell  v.   Manhattan    Eye 

and  Ear  Hospital  319 

Vauuxem  v.  Bostwick  100 

Varnum  v.  Evans  238 

Vater  i'.  Lewis  248 

Vawter  v.  Baker  237 
Vegelahn  v.  Guntner                   373,  374 

Veuuiug  f.  Bray  79 
Verona   Central     Cheese     Co.    v. 

Murtaugh  326 

Very  v.  Levy  130 

Vescelius  v.  Martin  143 
Vicksburg,   etc.   Railroad   Co.  v. 

O'Brien  184 

Viele  !'.  Germania  Ins.  Co.  143 

Vinton  v.  Baldwin  94,  96 

Violett  V.  Powell  176 

Vi.scher  v.  Yates  217 

Vrooman  >\  Turner  159 

Vusler  V.  Cox  73 


W. 

"Wabash  R.  v.  Kelley  285,  321 

V.  McDaniels  341,  351,  352 

Waddell  v.  Mordecai  250 

Waddill  r.  Sebree  251 

Wadsworth  v.  Sharpsteen  29 

Wagner  v.  Jayne  Chemical  Co.        356 

Wagoner  v.  Watts  38 

Wait  V.  Borne  141 

Walker  r.  Baird  366 

V.  Bank  247,  252 

V.  Crouin  209,  224,  372,  374 

V.  Guarantee  Ass'n  361 

V.  Herring  153 


Page 

Walker  v.  Osgood  110 

V.  Rostron  257 

V.  Swartwout  255 

Wall  V.  Delaware,  etc.  R.  345 

Wallace  v.  Bank  146 

t;.  Central  Vermont  R.  355 

V.  Finberg  266,  310 

t'.  Floyd  25,  92 

Wallis  Tobacco  Co.  r.  Jackson  137,  143 

Walls  V.  Bailey  139 

Walsh  V.  Fisher  99 

V.  Whitcomb  87 

Walter  v.  James  52 

Walton  V.  N.  Y.,  etc.  Co.  298 

Wambole  v.  Foots  85 

Waples  V.  Hastings  28 

Warax  v.  Cincinnati,  etc.  R.  361,  365 

Ward  V.  Evans  145 

V.  St.  Vincent's  Hospital  319 


V.  Smith 

V.  Williams 
Warder  v.  White 
Ware  v.  Morgan 
Warlow  V.  Harrison 
Warner  v.  M'Kay 

V.  Martin 

V.  Southern  Pac.  R. 
Warr  v.  Jones 
Warren  v.  Hewitt 

V.  Holbrook 
Warwick  v.  Slade 
Wash  V.  Trustees 
Washburn  v  Nashville,  etc.  R.  R 

Co. 
Washington    Gas    Light    Co.    v. 

Lansden 
Wasliington,  etc.  R.  v.  McDade 
Water  Company  v.  Ware 
Watkius  I'.  De  Armond 
Watson  V.  King 

V.  Swan 

t;.  Union  Iron  Co. 
Watt  r.  Brookover 
Watteau  v.  i'enwick 


33,  87,  109,  145 

49 

176 

2.54 

253 

174 

141,  150,  219 

313 

232,  233 

103 

7,  114 

79 

318 


31 


Watts  V.  Kavanagh 
Weare  r.  Gove 

I'.  Williams 
Webb  V.  Smith 
Weber  v.  Brooklyn,  etc.  R.        308,  311 

V.  Weber  263,  264,  362 


210 

351 

277 

74 

89 

45 

113 

155 

142,143,164,166, 

167 

80 

231 

136 

182 


CASES   CITED. 


Page 
Weed  V.  Adams  150 

V.  Panama  R.  305 

Weeks  v.  Holmes  93 

Weisbrod  v.  Chicago,  etc.  R.         30.  31 
Weiss  V.  Wliitteniore  267 

Welch  V.  Maine  Cent.  R.  293 

Wells  &  F.  Co.  i;.  Gortorski  355 

West    Jersey  &   Seashore   R.    r. 

Welsh  299.  303,  304 

West  St.  Louis  Sav.  Bk.  v.  Shaw- 
nee Couuty  Bk.  156 
Western  Bank  v.  Addie                      200 
Western,  etc.  Ry.  v.  Bishop                348 
Western  Mortg.  &  Invest.  Co.  v. 

Ganzer  190 

Western  Pub.  House  v.  Dist.  Tp. 

of  Rock  45 

Western  Trans.  Co.  v.  Barber         112, 

221 

Westfield  Bank  v.  Cornen  191 

Weston  f.  Davis  93 

Wetherbee  i;.  Partridge  277 

Whcatly  v.  Miscal  101 

Wheeler  t;.  McGuire  131,  137,  142 

V.  Nevins  38 

V.  Wason  Mfg.  Co.  352 

Wheeler,  etc.  Co.  v.  Augbey  48 

V.  Boyce  314 

i;.  Givan  141,  150 

Whelan  v.  Reilly  146 

Whi]pple  r.  Whitman  146,  155 

White  r.  Equitable,  etc.  Union  39 

i;.  Fuller  152 

V.  Madison  231 

i;.  Miller  181,182 

V.  Nellis  369 

V.  Owen  223 

r.  Procter  118,153 

V.  Sawyer  200,  267 

V.  Skinner  231 

Whitehead  v.  Greetham       40,  122,  360 

V.  Reddick  238 

V.  Tavlor  57 

V.  Tuckett  15,  127, 132 

Wliileman  v.  Hawkins  109 

Whiteside  v.  United  States  135 

Whitfield  V.  Lord  Le  Despencer      263, 

362 

r.  Paris  317 

Whitfnrd  I'.  Laidler  238,  254 

Whiting  V.  Mas.s.,  etc.  Ins.  Co.  43 


Page 

Whitney  v.  Dutch  28 

r.  Marline  108,109 

r.  Merchants'  Union  Exp.  Co.     107 

V.  AVvman  44,  230,  234 

Whittaker  v.  I).  &  H.  C.  Co.      341,  352 

Whittenbrock  v.  Bellmer  48 

Wichita  Bank  v.  Atchison,  etc.  R.     207 

Wick  China  Co.  v.  Brown  372 

Wickham  v.  Wickham  121 

Widrig  V.  Taggart  34,  101 

Wiggin  V.  St.'  Louis  278 

Wild  V.  Bank  156 

Wilkinson  ».  Coverdale  360 

V.  Ileavenrich  37,  53 

Wilks  1-.  Back  170,  237 

Willcox  V.  Arnold  235 

Willcox,  etc.  Co.  v.  Ewing  8 

William  v.  Koehler  299 

\Vm.  Lindeke  Land  Co.  v.  Levy         165 

Williams  v.  Evans  153 

V.  Innes  180 

V.  Johnston  146 

V.  McKay  124,  125 

V.  Merle  263 

V.  Milliugton  262 

V,  North  China  Insurance  Co.      43 

V.  Planters'  Ins.  Co.  211 

V.  Pullman  Palace  Car  Co.      285, 

301 
V.  Robbins  241 

V.  School  District  36 

V.  Second  N.  B.  240 

V.  Stevens  115 

V.  Walker  145 

V.  Williams  113 

V.  Woods  116 

Williamson  i-.  Barbour  114 

V.  Barton  230,  235 

V.  Cambridge  R.  183 

V.  Loui.^ville  Industrial  School    320 
Wilson  )'.  Bcardsley  133 

V.  Board  of  Education  101 

r.  Brett  122,360 

V.  Dame  95 

V.  Edmonds  26 

V.  Ford  73 

V.  Hart  162 

V.  Poultcr  50 

V.  Tumman  42,  45,  46 

V.  West  Hartlepool,  etc.  Ry.        54 
V.  Wilson  107 


CASES 

CITED. 

n 

Page 

Page 

Wiltse  I'.  State  Bridge  Co. 

298 

Wright  V.  Central  R.  Co. 

108 

Wiltshire  v.  Sims 

141 

1  -r2 

V.  Cronipton 

365 

Wincliestcr  r.  Howard 

17.5 

V.  Dannah 

35 

Wing  v.  Click 

2.5.5 

V.  Davidson 

7 

Wiiismorc  r.  Greetibank 

.371 

r.  Eaton 

.    61 

Wirehach  r.  First  Nat.  Bk 

29 

V.  New  York  Cent.  R. 

334,  336 

Wiscousiu  V.  Toriims 

5 

4,60 

V.  Wilcox 

16,  306 

Wisconsin    Central   11.   v. 

United 

Wyllie  V.  Palmer 

284 

States 

215 

Wise  V.  Ry.  Co. 

310 

Wishard  v.  McNeill 

142 

X. 

Wolf  V.  Howes 

99 

V.  Studebaker 

98 

Xenos  V.  Wickham 

152 

Wolfe  V.  Pugh 

200 

,  201 

Wolff  V.  Koppel 

121 

Wood  V.  Baxter 

253 

Y. 

V.  Farnell 

318 

V.  Goodridge 

238 

Yale  V.  Eames 

147 

V.  McCain 

60 

Yates  V.  Brown 

287 

V.  Moriarty 

160 

Y.  B.  (.34  &  35  Edw.  I.) 

162 

Woodman  v.  Met.  R.  Co. 

9 

Y.  B.  (7  H.  IV.  34  pi.  1) 

42 

Woodward  v.  Suydam 

61 

Yerrington  v.  Green 

100 

V.  Washburn 

368 

York  V.  Chicago,  etc.  R. 

284 

Woolfe  V.  Home 

253 

Young  V.  Cole 

139,  141 

Worden  v.  Humcston,  etc. 

R.  Co. 

183 

V.  Schuler 

251 

Workman  r.  Wright 

59 

V.  Stevens 

29 

Worrall  v.  Munn 

38 

Worthington  v.  Cowles 

235 

I'.  Waring 

358 

z. 

Wrijiht  V.  Boynton 

117 

V.  Cabot 

174 

Zerrahn  v.  Ditsou 

92 

BOOK  I. 
PRINCIPAL  AND  AGENT. 


THE  LAW  OF  AGENCY, 


INTRODUCTION. 


CHAPTER  I. 

PRELIMINARY  TOPICS. 

§  1.     Representation  in  the  law  of  obligation. 

Legal  obligations  are  either  primary  antecedent  obligations 
or  secondary  substituted  obligations.  The  obligation  to  fulfil 
a  contractor  the  obligation  not  to  assault  another, is  primary. 
The  obligation  to  pay  damages  for  not  fulfilling  a  contract,  or 
for  assaulting  another,  is  secondary  or  substituted,  and  arises 
only  as  a  consequence  of  the  breach  of  the  primary  one. 

The  primary  obligations  are  imposed  either  by  one's  volun- 
tary undertaking  or  by  the  law,  irrespective  of  one's  volition, 
upon  grounds  of  public  policy  or  utility.'  Usually  the  volun- 
tary undertaking  originates  in  an  offer  or  a  representation 
made  to  another  person  and  acted  upon  by  him.  Thus  a  con- 
tract or  a  gratuitous  undertaking  or  a  representation  may, 
when  acted  upon  by  another  person,  impose  an  obligation 
which  could  not  have  existed  but  for  the  obligor's  voluntary 
act.  On  the  other  hand,  the  obligation  not  to  assault  or 
defame  another,  or  not  to  convert  another's  goods,  is  imposed 
upon  every  man  in  society  without  any  act  or  consent  of  his. 

The  secondary  substituted  obligations  arise  from  an  act  or 
omission  resulting  in  a  breach  of  a  primary  obligation.     If 

^  Voluntary  primary  obligations  have  been  termed  "recusable  obliga- 
tions," while  involuntary  primary  obligations  have  been  termed  "  irre- 
cusable obligations."  AVigmore,  8  Harv.  Law  Rev.  200;  Harrimau  on 
Cont.  p.  6. 


4  AGENCY. 

the  j)riiiiary  obligation  was  voluntary,  it  may  have  been  a 
contract,  a  representation,  or  an  undertaking  either  not 
amounting  to  contract  or  extending  beyond  it.  In  the  first 
case  we  call  the  failure  to  fulfil  the  obligatiijn  a  breach  of 
contract ;  in  the  second,  misrepresentation,  fraud,  or  deceit;  ^ 
in  the  third,  negligence.  If  the  primary  obligation  was  an 
involuntary  one,  we  call  the  breach  of  it  a  tort,  and  we  have 
various  special  names  for  these  torts,  as  assault,  defamation, 
conversion,  negligence,  etc. 

Most  of  the  things  which  a  man  may  do  in  person  he  may 
do  through  a  representative;  accordingly,  he  may  create  a 
voluntary  primary  obligation  through  a  representative,  or  he 
may  through  a  representative  commit  a  broach  of  a  primary 
obligation,  and  thus  imj)ose  upon  himself  a  secondary  substi- 
tuted obligation.  Representation,  therefore,  is  of  great 
importance  in  the  law  of  obligation.  It  creates  a  subsidiary 
range  of  obligations  differing  from  the  main  range  only  in  the 
fact  that  the  one  obliged  acts  mediately  through  a  represen- 
tative, instead  of  immediately  in  person. 

The  problem  reduced  to  its  simplest  terms  is  to  discover 
when  and  under  what  circumstances  a  man  is  obligated  by  the 
act  of  his  representative,  either  (1)  in  creating  or  attempting 
to  create  voluntary  primary  obligations,  or  (2)  in  committing 
a  breach  of  primary  antecedent  obligations  and  thus  giving 
rise  to  secondary  sul)stituted  obligations.  It  is  obvious  that  a 
representative  might  naturally  be  authorized  to  create  pri- 
mary obligations,  but  would  not  ordinarily  be  authorized  to 
commit  breaches  of  them.  Agencies  would  therefore  be 
expected  to  be  created  for  the  first  purpose,  but  not  for  the 
second.  But  even  if  an  agency  be  created  for  the  first  pur- 
pose, the  agent  may  go  beyond  his  actual  authority  and  make 

1  Deceit  and  like  wrontj^.s  are  anomalous.  The  obligor  imposes  upon 
himself  the  oMigation  by  his  own  representation,  acted  upon  by  the  other 
party,  and  conunits  a  breach  of  it  at  once  in  consequence  of  its  falsity. 
This  results  in  the  secondary  obligation  to  pay  damages,  or  to  make 
restitution,  or  it  works  an  estoppel,  according  to  circumstances.  Owing 
to  some  peculiarities  of  classification  and  procedure,  deceit  h;is  come  to 
be  regarded  as  a  pure  tort,  but  in  several  essential  particulaVs  it  is  more 
nearly  allied  to  contract.     See  post,  p.  12. 


INTRODUCTION.  5 

promises  or  representations  not  authorized.  Is  his  principal 
bound  thereby  ?  So  also  a  servant  appointed  for  a  purpose 
entirely  foreign  to  the  creation  of  obligations,  may  commit  a 
breach  of  one  while  about  his  master's  business.  Is  the  mas- 
ter bound  ?  These  and  similar  problems  are  those  that  are 
treated  under  the  title  of  agency. 

§  2.     Meaning  and  scope  of  agency. 

Agency  is  a  term  signifying  the  legal  relations  established 
when  one  man  is  authorized  to  represent  and  act  for  another 
and  does  so  represent  and  act  for  another.  The  one  repre- 
sented may  be  comprehensively  termed  the  constituent,  and 
the  one  representing  him  may  be  termed  the  representative. 
More  specifically  the  constituent  is  called  either  a  principal 
or  a  master,  while  the  representative  is  called  either  an  agent 
or  a  servant.  Agency  therefore  divides  itself  into  two  main 
heads,  —  the  law  of  principal  and  agent,  and  the  law  of  master 
and  servant. 

The  authority  is  usually  conferred  upon  the  representative 
by  the  will  of  the  constituent,  but  in  a  few  instances  it  is  con- 
ferred by  the  law  in  consequence  of  an  existing  relation  or 
status  of  the  two.  Historically,  the  relation  probably  origi- 
nated in  status,  and  may  have  rested  upon  a  fiction  of 
identity,!  but  with  the  growth  of  individualism  and  the 
progress  from  status  to  contract,  the  relation  has  come  to  be 
mainly  a  consensual  one.  Yet  the  agency  of  a  wife  in  the 
purchase  of  necessaries  is  a  distinct  remnant  of  the  older 
doctrine,^  and  there  has  been  an  anomalous  revival  of  it  in 
our  day  in  the  identification  of  a  child  with  its  parent  or 
guardian  in  cases  of  contributory  negligence.^ 

The  act  which  the  representative  is  authorized  to  do  may 
be  either,  —  (1)  to  represent  the  will  of  the  constituent  to  third 
persons  with  a  view  to  establishing  new  legal  relations  be- 
tween such  persons  and  the  constituent  by  creating  voluntary 

1  O.  W.  Holmes,  Jr.,  4  Ilarv.  Law  Rev.  345;  5  Ihid.  1.  But  see  2 
Pollock  and  Maitland's  Hist,  of  Eng.  Law,  225-227,  530,  and  7  Harv. 
Law  Rev.  107. 

2  Post,  §  55. 

«  Hartfield  v.  Roper,  21  Wend.  (N.  Y.)  614. 


6  AGENCY. 

primary  obligations  with  their  correlative  rights,  or  (2)  to 
perform  for  the  constituent  operative  or  mechanical  duties 
not  intended  to  create  any  new  legal  relations  between  him 
and  third  persons.  When  the  representative  is  employed  for 
the  first  purpose,  he  is  called  an  agent,  and  his  constituent  is 
called  a  principal.  When  he  is  employed  for  the  second 
purpose,  he  is  called  a  servant,  and  his  constituent  is  called  a 
master. 

The  legal  consequences  of  creating  an  agency  may  l^e  three- 
fold :  (1)  to  establish  new  legal  relations  between  the  constitu- 
ent and  representative ;  (2)  to  establish  new  legal  relations 
between  the  constituent  (principal)  and  third  persons,  that  is, 
to  impose  voluntary  ])rimary  obligations  u{)on  the  principal  in 
favor  of  third  persons,  or  give  him  correlative  right  against 
third  persons,  or  to  disturb  existing  legal  relations  between 
the  constituent  (master)  and  third  persons,  that  is,  to  cause 
a  breach  of  existing  primary  obligations  ;  (3)  to  create  new 
legal  relations  between  the  representative  (agent)  and  third 
persons,  or  to  disturb  existing  legal  relations  between  the  rep- 
resentative (servant)  and  third  persons. 

Agency,  then,  is  the  title  under  which  we  treat  of  the  doc- 
trines of  representation  in  the  law  of  obligation.  Under  the 
head  of  principal  and  agent,  we  treat  of  the  creation  of 
voluntary  primary  obligations  and  their  correlative  rights. 
Under  the  head  of  master  and  servant,  wc  treat  of  the  breach 
of  such  obligations  and  the  substitution  of  secondary  obliga- 
tions and  their  correlative  rights  and  remedies.  Under  both 
heads,  we  seek  to  discover  the  source  and  extent  of  the  repre- 
sentative's authority,  the  rights  and  obligations  of  the  consti- 
tuent and  representative,  of  the  constituent  and  third  persons, 
and  of  the  representative  and  third  persons. 

§  3.     Distinction  betvreen  agency  and  other  legal  relations. 

Before  jjroceeding  to  a  discussion  of  the  essential  i)roblems 
of  aginicy,  it  is  necessary  to  distinguish  this  legal  concept  fi-oni 
other  concepts  more  or  less  nearly  related  to  it.  One  person 
may  act  in  the  interest  of  another  without  being  technically 
his  agent  or  servant.    In  order,  therefore,  to  delimit  our  subject, 


INTRODUCTION.  7 

we  must  first  set  aside  and  distinguish  these  analogous  legal 
relations. 

(1)  Agency  or  Trust.  "The  germ  of  agency  is  hardly  to 
be  distinguished  from  the  germ  of  another  institution  which 
in  our  English  law  has  an  eventful  future  before  it,  the  '  use, 
trust,  or  confidence.' "  ^  The  two  are  now,  of  course,  quite 
distinct,  and  the  distinction  is  found  fundamentally  in  this, 
that  in  agency  the  legal  title  and  use  of  the  property  concerned 
are  in  the  principal  and  not  the  agent,  while  in  trusts  the  legal 
title  is  in  the  trustee  and  the  use  in  the  cestui.  Accordingly, 
agency  is  a  topic  of  the  common  law,  and  trusts  a  topic  of  equity 
jurisdiction.  Yet  for  some  purposes  an  agent  is  spoken  of  as 
a  quasi  trustee,  and  is  required  to  account  in  equity .^ 

(2)  Agency  or  Partnership.  It  is  sometimes  difficult  to 
determine  whether  a  contract  creates  the  ordinary  relation 
of  principal  and  agent  or  the  special  relation  of  partnership. 
Even  where  parties  unite  in  a  joint  enterprise  and  agree  to 
share  the  profits,  a  partnership  does  not  necessarily  result ; 
the  participation  in  profits  is  an  element  in  the  problem,  but  is 
not  decisive.  It  is  a  question  of  construction  upon  the  whole 
agreement,  the  intention  of  the  parties  being  the  controlling 
consideration.'^  A  partner  is  also  an  agent,  but  his  agency  is 
of  a  special  and  peculiar  character.* 

(3)  Agency  or  Sale.  Whether  the  relation  between  the 
parties  is  that  of  principal  and  agent,  or  vendor  and  vendee, 
must  depend  upon  the  construction  of  the  contract.  A.  agrees 
to  dispose  of  goods  placed  in  his  hands  by  B.,  and  at  periodical 
intervals  return  an  account  to  B.  of  the  sales  made,  and  turn 
over  to  B.  the  value  of  the  goods  sold,  at  a  fixed  price,  keeping 
himself  the  difference  between  this  price  and  the  price  at  which 
he  has  sold  them.  This  might  be  a  del  credere  agency,^  or  a 
sale  as  between  A.  and  B.     The  construction  to  be  placed  on 

1  2  Pollock  and  Maitland,  Hist,  of  Eng.  Law  before  Edw.  I.,  p.  226. 

2  Marvin  v.  Brooks,  9-1  N.  Y.  71 ;  Warren  v.  Holbrook,  95  Mich.  185; 
cf.  Uhlnian  v.  N.  Y.  Life  Ins.  Co.,  109  N.  Y.  421. 

3  Grinton  v.  Strong,  148  111.  587 ;  Wright  v.  Davidson,  13  Minn.  449. 
*  Burdick  on  Partnership,  p.  159,  195. 

6  Post,  §  90. 


8  AGENCY. 

tlie  contract  will  vary  in  accordance  with  the  terms  and  the 
evident  intention  of  the  parties.^  The  refinements  are  too 
nice  to  be  discussed  liere,  but  will  be  disclosed  by  an  examina- 
tion of  the  cases. 

(4)  Agency  or  Bailment.  P.  may  deliver  his  property  to 
A.  for  either  of  two  purposes,  namely,  to  sell  lor  P.  or  to  keep 
for  P.  In  the  first  case  A.  is  an  agent ;  in  the  second  a  bailee. 
Tiie  nature  of  the  understanding  between  P.  and  A.  must  de- 
termine whether  the  transaction  results  in  the  creation  of  an 
agency  or  a  bailment.  Thus  in  Biggn  v.  Evans^  an  opal  table 
was  entrusted  to  a  dealer  on  condition  that  it  was  not  to  be 
sold  without  first  securing  the  authorization  of  the  owner.  The 
dealer  sold  it  without  such  authorization,  and  it  was  held  that 
the  table  was  never  entrusted  to  the  dealer  to  sell,  but  only  to 
keep,  and  that  the  purchaser  acquired  no  title.  Such  a  case 
may  involve  a  question  of  ostensible  agency  or  a  question  of 
ostensible  ownership.  Thus  if  an  owner  invests  a  bailee  with 
the  indicia  of  ownership,  a  purchaser  from  the  bailee  may  ac- 
quire a  good  title  as  against  the  owner,  not  because  the  owner 
is  estopped  to  deny  the  agency  (for  there  is  no  holding  out  as 
agent),  but  because  he  is  estopped  to  deny  the  bailee's  owner- 
ship.3  It  may  well  be  questioned  whether  Biggs  v.  Evans 
ought  not  to  have  been  decided  in  favor  of  the  purchaser,  on 
tlie  ground  that  one  who  permits  his  goods  to  be  exposed  by  a 
dealer  in  such  goods  is  estopped  to  deny  the  dealer's  owner- 
ship. The  doctrine  of  ostensible  ownership  is  especially  ajipli- 
cable  to  cases  where  the  true  owner  invests  another  with  docu- 
ments of  title.*  It  is  to  extend  this  doctrine  of  ostensible 
ownership  that  the  "  Factors  Acts  "  have  been  passed.^ 

(5)  Agencij  or  Lease.     In  like  manner  it  becomes  a  matter 

1  Ex  parte  White,  L.  R.  0  Ch.  App.  307;  Ex  parte  Bright,  L.  R.  10 
Ch.  D.  506;  National  Cordage  Co.  v.  Sims,  44  Neb.  148;  Willcox,  &c. 
Co.  V.  Ewiug,  141  U.  S.  627;  Chezum  v.  Kreighbaum,  4  Wash.  680; 
Singer  Mfg.  Co.  v.  Rahn,  132  U.  S.  518. 

2  18f»4,  1  Q.  B.  88. 

3  McCauley  v.  Brown,  2  Daly  (N.  Y.  C.  P.),  426. 

«  Lickbarrow  v.  Mason,  2  T.  R.  63;  Pickering  v.  Busk,  15  East,  38; 
post,  §  170. 
6  Post,  §  171. 


INTRODUCTION.  9 

of  construction  whether  a  party  to  a  contract  is  an  agent  or  a 
lessee.  Although  the  party  may  be  acting  under  a  formal 
power  of  attorney  authorizing  him  to  represent  the  other  party 
in  the  management  of  certain  property,  yet  this,  taken  in  con- 
nection with  the  intent  and  conduct  of  tlie  parties,  may  be 
construed  as  a  lease  of  the  property  so  as  to  make  the  lessee 
liable  for  rent  as  the  assignee  of  the  terni.^  If  the  construc- 
tion of  the  relation  is  that  of  lessor  and  lessee,  and  not  that  of 
principal  and  agent,  the  lessor  is  not  liable  for  the  wilful  or 
negligent  acts  of  the  lessee  in  the  conduct  of  the  property.''^ 
Thus  if  one  lets  his  farm  and  stock  on  shares,  he  is  not  liable 
for  the  negligence  of  the  lessee  in  keeping  a  vicious  animal.^ 

(6)  Serva7it  or  Independent  Contractor.  A  person  may  be 
engaged  to  perform  an  operative  act  for  another  without  be- 
coming a  servant.  The  test  usually  applied  is  whether  the 
employer  retains  any  control,  or  right  of  control,  over  the 
means  or  methods  by  which  the  work  is  to  be  accomplished. 
If  he  does,  the  employee  is  a  servant ;  *  if  he  does  not,  the  other 
party  to  the  contract  is  not  strictly  an  employee  at  all,  and  is 
in  no  sense  a  servant,  but  is  an  independent  contractor,  re- 
sponsible to  his  contractee  for  results  only.^  This  is  more 
fully  considered  hereafter.^  The  question  whether  one  is  liable 
for  the  unsafe  condition  of  his  premises,  or  of  a  public  street 
over  which  he  has  been  given  control,  involves  other  consider- 
ations having  to  do  with  the  high  degree  of  responsibility  placed 
upon  occupiers  of  premises.'^ 

1  Eagsdale  v.  Land  Co.,  71  Miss.  284,  303-307. 

2  Miller  v.  New  York,  &c.  R.,  125  N.  Y.  118. 

3  IVIarsh  v.  Hand,  120  N.  Y.  315. 

*  Linnehan  v.  Rollins,  137  Mass.  123  ;  Lawrence  v.  Shipman,  39  Conn. 
586.  The  owner  may  approve  or  disapprove  the  results  of  the  work  daily 
without  retaining  control  over  methods.  Casement  v.  Brown,  148  U.  S. 
615. 

6  Bailey  v.  Troy,  &c.  Co.,  57  Yt.  252;  Harrison  v.  Collins,  86  Pa.  St. 
153;  King  v.  New  York  Central,  &c.  R.,  66  N.  Y.  181 ;  Morgan  v.  Smith, 
159  Mass.  .570;  35  N.  E.  101. 

«  Post,  §  218. 

7  Gorham  v.  Gross,  125  Mass.  232;  Woodman  v.  Met.  R.  Co.,  149 
Mass.  335. 


10  AGENCY. 

(7)  Transfer  of  Service.  A  master  may  transfer  tempora- 
rily tlic  service  of  his  servant  to  another,  so  as  to  make  the 
servant  the  rei)resentative  of  the  transferee.  Thus  A.  rents 
a  machine  to  B.  with  a  man  to  operate  it.  If,  in  the  opera- 
tion of  the  macliine,  the  man  is  under  the  control  of  B.,  he 
becomes  B.'s  servant  as  to  the  operation,  though  not  perhaps 
as  to  the  inspection  aud  repair,  of  the  machine.^  But  other- 
wise, if  the  man  remains  under  the  control  of  A.,  who  stands 
somewhat  in  the  relation  of  an  independent  contractor.*^  The 
master  cannot  transfer  the  control  over  a  servant  without  the 
lattcr's  consent.^  Transfer  of  service  is  more  fully  considered 
hereafter.* 

§  4.  Distinction  between  the  law  of  principal  and  agent,  and 
the  law^  of  master  and  servant. 

Agency  ^  divides  itself  into  two  main  heads,  —  the  law  of 
principal  and  agent,^  and  the  law  of  master  and  servant. 
The  fundamental  distinctions  between  the  two  are  to  be 
sought,  —  (1)  in  the  nature  of  the  act  authorized,  and  (2)  in 
the  nature  of  the  obligation  resulting  from  the  performance 
of  the  act,  and  (3)  in  the  nature  of  the  legal  test  fixing  the 
constituent's  liability  for  an  act  in  excess  of  authority. 

(1)  The  primary  distinction  l)etwecn  representation  through 
an  agent,  and  representation  through  a  servant,  lies  in  the 
nature  of  the  act  which  the  rei>rosentative  is  authorized  to 
perform.     An  agent  represents  his  principal  in  an  act  intended, 

1  Donovan  v.  Laing,  (1893)  1  Q.  B.  629. 

2  Quinn  v.  Complete  Electric  Const.  Co.,  46  Fed.  Rep.  506;  Huff  v. 
Ford,  126  Mass.  24. 

8  Post,  §  86. 

*  Post,  §  228. 

^  It  is  to  be  regretted  that  the  word  "  agency  "  should  be  used  to  cover 
the  whole  field  of  representation,  and  that  the  word  "  agent "  should  at  the 
same  time  be  used  as  the  name  of  the  representative  in  one  branch  of  it. 
H  there  were  another  word  for  agency  (e.  g.  representation),  or  aimtlicr 
word  for  agent  (e.  g.  deputy),  many  tedious  circumlocutions  niiglit  be 
avoided.  It  might  be  better  still  if  the  whole  field  were  called  the  "  Law 
of  Representation,"  while  the  branch  known  as  the  "  Law  of  Principal 
and  Agent"  were  called  the  "Law  of  Agency,"  and  that  known  as  the 
"  Law  of  Master  aud  Servant,"  were  called  the  "  Law  of  Service." 


INTRODUCTION.  11 

or  calculated,  to  result  in  the  creation  of  a  voluntary  primary 
obligation  or  undertaking.     A  servant  represents  his  master  I 
in  the  performance  of  an  operative  or  mechanical  act  of  ser-   • 
vice  not  resulting  in  the  creation  of  a  voluntary  primary  obli- 
gation, but  which  may  result,  intentionally  or  inadvertently,  in 
the  breach  of  an  existing  one.     An  agent  makes  offers,  repre- 
sentations, or  promises  for  his  principal,  addressed  to  third 
persons,  upon  the  strength  of  which  such  third  persons  change 
their  legal  relation  or  position.     A  servant  performs  operative  / 
acts  not  intended  to  induce  third  persons  to  change  their  legal  ! 
relations.    An  agent  has  to  take  account  of  the  mind  and  will  of  ; 
two  persons,  namely,  of  his  principal  whose  mind  he  represents, ' 
and  of  the  third  person  whose  mind  he  seeks  to  influence.     A  , 
servant  has  to  take  account  of  the  mind  and  will  of  one  per-  i 
son,  namely,  of  his  master  whose  existing  obligations  and 
duties  he  is  to  perform.     An  agent   may  cause   damage  by 
inducing  a  third  person  to  act.     A  servant  may  cause  damage 
by  acting  upon  a  third  person  or  his  property  or  rights.     In 
representation  through  an  agent  there  are  always  three  per- 
sons involved,  the  principal,  the  agent,  and  the  third  person. 
In  representation  through  a  servant,  there  are  only  two  per- 
sons primarily  involved,  the  master  and  the  servant,  and  the 
third  person  is  introduced  only  when  the  servant  commits,  in 
the  course  of  his  master's  business,  a  breach  of  the  obligations 
owing  by  the  master  to  a  third  person.    In  the  first  case,  there 
are  three  persons  and  the  third  is  induced  to  act.     In  the  sec- 
ond case,  there  are  three  persons  and  the  third  is  acted  upon. 
(2)  The     secondary    distinction    between    representation 
through  an  agent,  and  representation  through  a  servant,  hangs 
in  sequence  upon  the  primary  one.    The  agent,  by  influencing 
the  will  of  the  third  person,  induces  him  to  enter  into  new 
legal  relations  with  the  principal.     The  servant,  by  acting 
upon  the  already  existing  legal  relations  of  the  principal  and  | 
the  third  person,  may  commit  a  breach  of  his  principal's  obli- 
gations.    The  agent  lays  upon  his  principal  a  primary  obliga- 
tion to  make  good  a  promise  or  a  representation.     A  servant 
may  lay  upon  his  master  a  secondary  obligation  to  repair  the 
breach  of  an  antecedent  or  primary  one.     The  law  governing 


12  AGENCY. 

principal  and  agent  has  therefore  to  do  with  the  creation  of 
new  obligations.  The  law  governing  master  and  servant  has 
to  do  with  the  breach  of  existing  obligations.  The  main,  but 
notthejexclusive,  subject-matter  of  the  first  is  contract.  The 
main,  but  not  the  exclusive,  subject-matter  of  the  second  is 
tort.  The  first  includes,  besides  contract,  such  gratuitous 
undertakings  as  may  be  enforceable,  such  estoppel  obligations 
as  may  be  enforceable,  and  such  tort  obligations  as  result  from 
a  false  rci)resentation  acted  upon  by  the  one  to  whom  it  is 
made,  namely,  deceit  and  torts  analogous  to  deceit.  The 
second  includes,  besides  torts,  the  breach  of  existing  contract 
obligations  or  voluntary  undertakings,  though  it  will  usually 
be  found  in  such  cases  that  the  undertaking,  while  it  may 
originate  in  contract,  is  really  larger  than  contract,  and  that 
its  breach  is  remediable  in  an  action  ex  delicto.^ 

An  agent  therefore  is  a  representative  who  creates  bifac- 
toral  obligations  to  which  his  principal  is  a  party.  These 
are  usually  contracts ;  but  other  concepts  of  the  law  fall 
within  the  classification,  namely,  gratuitous  undertakings, 
estoppel,  and  deceit.  In  a  gratuitous  undertaking  the  obliga- 
tion is  voluntary,  and  it  is  fixed  by  the  act  of  the  one  who 
suffers  a  detriment  relying  upon  it.  In  estoppel  the  obliga- 
tion is  voluntarily  undertaken  by  making  a  representation 
and  is  fixed  by  the  act  of  the  one  who  suffers  a  detriment 
relying  upon  it ;  thereafter  the  maker  of  the  representation 
is  estopped  to  deny  its  truth.  In  deceit,  the  matter  is  not  so 
clear  because  of  the  habit  of  regarding  deceit  as  strictly  a 
tort  arising  from  the  breach  of  an  absolute  involuntary  obli- 
gation. But  deceit  differs  from  all  other  torts  in  this,  that  it 
consists  in  influencing  the  conduct  of  another  person  to  his 
damage.  Its  first  appearance  seems  to  have  been  in  an  action 
for  a  false  warranty,  and  it  was  not  until  1778  that  an  action 
in  assumpsit  on  a  warranty  first  appears  in  the  reported  cascs.^ 

^  For  example,  where  a  carrier  undertakes  by  contract  to  transport  a 
passenger,  and  liis  servant  entrusted  with  tlie  performance  of  the  duty  is 
negligent,  the  passenger  has  an  action  eitlier  for  breach  of  contract,  or 
in  tort  for  negligence.     Bigelow  on  Torts,  7th  ed.,  §§  54-56. 

^  Ames,  Hist,  of  Assumpsit,  2  Harv.  Law  Rev.  8. 


INTKODUCTICN.  13 

Moreover  the  first  actions  for  breach  of  parol  promises  were 
actions  on  the  case  for  deceit,^  and  assumpsit  to-day  retains  in 
the  doctrine  of  consideration  the  earmarks  of  its  origin, 
"  because  only  he  who  had  incurred  detriment  ujjon  the  failh 
of  the  defendant's  promise,  could  maintain  the  action  on  the 
case  for  deceit  in  the  time  of  Ilcnry  VII."  2  Deceit,  there- 
fore, while  sounding  in  tort,  resembles  contract  and  estoppel 
in  this,  that  it  arises  from  a  voluntary  representation  by  one 
party  acted  upon  by  another  to  his  detriment.  Strictly  speak- 
ing, the  obligation  is  created  voluntarily  by  the  one  making 
the  representation,  but  its  extent  is  determined  by  the  detri- 
ment suffered  by  the  one  acting  upon  it.  It  is  therefore 
proper,  or  at  least  it  serves  a  useful  purpose,  to  include 
deceit  among  the  voluntary  bifactoral  obligations. 

(4)  The  third  distinction  between  representation  through 
an  agent,  and  representation  through  a  servant,  lies  in  the 
nature  of  the  test  fixing  the  constituent's  liability  for  acts  of 
his  representative  in  excess  of  the  actual  authority.  In  the 
case  of  the  principal,  this  test  is  to  be  sought  in  the  doctrine 
of  estoppel.  In  the  case  of  the  master,  this  test  is  to  be 
sought  in  the  doctrine  that  one  who  employs  an  instrumen- 
tality for  an  operative  act  must  remain  liable,  within  reason- 
able limits,  for  its  defects.  The  nature  of  these  tests  will  be 
explained  more  fully  in  the  succeeding  section.  What  it  is 
important  to  note  here  is  the  fact  that  the  distinction  between 
the  two  branches  of  agency  involves  more  than  a  mere  matter 
of  classification,  and  goes  direct  to  the  central  problem  of 
agency,  namely,  when  and  upon  what  doctrine  is  a  consti- 
tuent liable  for  the  acts  of  his  representative  in  excess  of  the 
authority  conferred. 

§  5.     Basis  of  the  constituent's  liability  for  the  acts  of  his  repre- 
sentative. 

The  main  problem  of  agency  is  to  discover  when,  and  under 
what  circumstances,  a  man  is  liable  for  the  acts  of  his  repre- 
sentative.    This  problem  would  be  a  comparatively  easy  one 

1  Ames,  Hist,  of  Assumpsit,  2  Harv.  Law  Rev.  15. 
8  Ibid.  p.  16. 


1-i  AGENCY. 

were   it   true   that   a   man    is   obligated    by   the    act    of   his 
representative  only  when  he  has  in  fact  authorized  the  repre- 
sentative to  do  or  not  to  do  that  which  results  in  obligation, 
or  when  he  has  ratified  as  his  own  an  act  of  his  representative 
not  originally  authorized.     Agency   is  a    compendious  term 
signifying  the  instrumentality  through  which  a  i-esult  is  ac- 
complished ;  in  its  normal  sense  it  means  the  instrumenlality 
through  which  the  will  of  an  individual   is  accomplished.     If 
therefore  a  man  chooses  to  em])loy    a  particular  agency  to 
carry  out  his  i)re-determined  purpose,  he  is  of  course  respon- 
sible for  the  result  determined  upon  and  reached,  as  fully  as 
if  he  had  acted  immediately  instead  of  mediately.     In  such  a 
case,  we  should  be  concerned  only  with  the  result,  and  not 
with  the  means  through  which  it  was  accomplished.     But  the 
doctrine  is  much  more  sweeping  in  its  application.     In  the 
employment  of  a  human  agency,  the  constituent  must  take 
account,  not  only  of  his  own  will,  but  also  of  the  will  of  the 
representative.     This  second  will  may   prove   either    incom- 
petent, or  careless,  or  perverse,  and  from  this  incompetence, 
carelessness,  or  perversity  may  flow  consequences  never  in- 
tended by  the  constituent,  but  for  which  the  law  holds  him 
accountable.     Thus  it  follows  that  a  man  may  be  obligated 
by  the  act  of   a  representative  which  he  has   not  only  not 
authorized,  but  which  he  has  in  terms  forbidden.    The  problem 
therefore  resolves  itself  into  this,  when  and  why  is  a  man  held 
liable  for  acts  of  his  representative,  neither  commanded  nor 
ratified,  acts  in  excess  of  any  actual  authority  conferred  ? 

It  has  been  contended  that  we  must  seek  the  basis  of 
liability  in  such  cases  in  the  fiction  of  identity.^  It  has,  on 
the  other  hand,  been  contended  that  this  fiction  plays  a  small 
part  historically  in  the  development  of  the  law  of  representa- 
tive liability,  and  that  the  basis  of  the  liability  is  the  voluntary 
act  of  the  employer  in  setting  the  representative  in  motion, 
or  that  one  must  answer,  within  reasonable  limits,  for  an 
instrumentality  operating  for  his  benefit.^  Still  others  would 
contend  that  the  whole  matter  is  determined  mainly  by  the 

1  O.  W.  Holmes,  Jr.,  4  Haw.  Law  Rev.  345,  and  5  Ibid.  1. 

2  J.  H.  AVigmore,  7  Harv.  Law  Rev.  383. 


INTRODUCTION".  15 

practical  consideration  that  the  employer  is  usually  better 
able  to  pay  than  the  representative.' 

Much  confusion  has  been  occasioned  by  the  failure  to  dis- 
tinguish between  liability  for  acts  creating  primary  obligations 
and  giving  rise  to  primary  rights,  and  liability  for  acts  violat- 
ing primary  obligations  and  giving  rise  to  secondary  obliga- 
tions and  secondary  or  remedial  rights.  In  the  first  case  the 
employer  has  authorized  a  representative  to  make  promises 
or  representations  and  to  induce  third  parties  to  act  upon 
them.  The  sole  legal  question  then  is,  had  the  third  person, 
in  acting  upon  the  representative's  statements,  reasonable 
grounds  for  believing  that  the  representative  was  authorized 
to  make  them  ?  In  other  words,  had  the  agent  apparent 
authority  to  do  what  he  did  do  ?  If  so,  then  the  employer  is 
estopped  to  deny  that  that  which  he  made  to  appear  to  be 
true  is  not  true,  since  a  third  person  has  acted  upon  the  repre- 
sentation of  the  principal  as  to  the  agent's  authority .^  This 
is  a  solid  ground  of  liability  which  dispenses  with  all  fictions 
and  all  slippery  considerations  of  the  limits  within  which  one 
man  ought  to  be  held  liable  for  the  perversity  of  his  instru- 
mentalities. The  earliest  authorities  which  suggest  this 
ground  of  liability  are  in  cases  of  deceit  where,  as  in  contract, 
the  essence  of  the  employer's  liability  consists  in  the  fact  that 
he  has  held  out  his  agent  as  having  authority  to  make  repre- 
sentations, and  the  third  party  has,  relying  on  this  apparent 
authority  and  the  agent's  representations,  changed  his  legal 
position.^  And  in  contract  cases  this  ground  is  distinctly 
taken.* 


1  2  Pollock  and  Maitland,  Hist,  of  Eng.  Law,  530-532.  See  also  7 
Harv.  Law  Rev.  107. 

2  Post,  §§  51,  52,  102,  108. 

8  Southerne  v.  Howe,  2  Rolle's  Rep.  5,  26  (1618),  in  the  argument  of 
counsel;  Hern  v.  Nichols,  1  Salk.  289  (1708). 

*  Hazard  v.  Treadwell,  1  Stra.  506  (1768)  ;  Pickering  v.  Busk,  15  East, 
38  (1812)  ;  Whitehead  v.  Tuckett,  15  East,  400  (1812).  In  Pickering  y. 
Busk,  it  is  said,  "  This  case  .  .  .  proceeds  on  the  principle,  that  the  plain- 
tiff having  given  Swallow  an  [implied]  authority  to  sell,  he  is  not  at  lib- 
erty afterwards,  when  there  has  been  a  sale,  to  deny  the  authority."   The 


16  AGENCY. 

But  in  the  second  class,  whore  the  act  of  the  representative 
consists  in  the  breach  of  liis  employer's  antecedent  obligations 
and  an  infringement  of  the  third  party's  antecedent  rights, 
the  basis  of  liability  is  by  no  means  so  clear.  Here  the  third 
party  is  not  misled  by  any  representations  of  the  employer 
as  to  the  employee's  authority.  Here  the  consideration  that 
where  one  employs  an  instrumentality  for  a  merely  operative 
purpose  he  ought  to  be  liable,  within  reasonable  limits,  for  its 
defects,  must  be  invoked.^  But  what  are  the  limits  ?  (1)  A 
negligent  performance  of  the  operative  act  while  the  sei'vant 
is  within  the  course  of  the  employment,  is  an  incident  which 
ought  fairly  to  attach  to  the  operation  as  a  whole,  and  render 
the  master  liable.  Upon  this  modern  cases  express  no  doubt. 
(2)  A  wilful  damage  inflicted  upon  a  third  party  by  the 
servant  in  the  performance  of  the  operative  act  (as  an  inten- 
tional assault  or  trespass)  has  given  more  trouble.^  But  the 
modern  form  which  the  test  of  liability  has  taken  is  that  if 
the  wilful  act  was  done  by  the  servant  in  furtherance  of,  and 
within  the  course  of  the  employment  or  business  entrusted  to 
him,  the  master  is  liable.^  It  will  be  noted  that  there  are 
two  tests  here  (a)  "  in  the  course  of  the  employment"  and 
(h)  "  in  the  furtherance  of  the  employment,"  or,  as  it  is  some- 
times stated, "  for  the  master's  benefit."  While  both  of  these 
tests  are  usually  applied,  there  are  some  cases  w^hich  escape 
the  second,  and  the  master  is  held  liable  where  the  act  was 
not  "  in  the  furtherance  of  the  employment."  ^ 

The  basis  of  liability  for  a  representative's  acts  may  there- 
fore be  said  to  be  : 

principle  is  clearly  put  by  Lord  Cranworth  in  Pole  ?'.  Leask,  33  L.  J.  Ch. 
155  (1863). 

1  Undoubtedly  the  earliest  cases  proceeded  on  the  ground  of  an  ex- 
press  command  (save  where  as  in  cases  of  fire  there  is  a  duty  to  insure 
safety),  but  the  law  speedily  escapes  this  narrow  doctrine,  and  gradually 
moulds  itself  into  the  modern  doctrine  through  the  intermediate  fiction  of 
an  "implied  command."     See  Wigmore,  7  Harv.  Law  Rev.  383. 

2  McManus  v.  Crickett,  1  East,  107  (1800) ;  Wright  v.  Wilcox,  19 
Wend.  343  (1838). 

8  Post,  §  252. 
*  Post,  §  254. 


INTKODUCTION,  17 

(1)  Command  or  ratification  where  the  act  is  within  the 
actual  authority ;  ^ 

(2)  Estoppel  to  deny  authority,  where  the  act  is  in  excess 
of  actual  authority,  and  consists  in  the  making  of  a  promise 
or  representation  upon  which  a  third  party  acts ;  ^ 

(3)  The  course  of  the  employment,  where  the  act  is  in 
excess  of  authority  and  consists  in  negligent  harm  to  a  third 
person  in  the  performance  of  an  operative  act ;  ^ 

(4)  The  course  of  the  employment  and  the  furtherance  of 
the  employment  or  husiness,  where  the  act  is  in  excess  of 
actual  authority,  and  consists  in  a  wilful  harm  to  a  third 
person.^ 

§  6.     Definition  of  agent  and  servant. 

An  agent  is  a  representative  vested  with  authority,  real  or 
ostensible,  to  create  voluntary  primary  obligations  for  his 
principal,  by  making  contracts  with  third  persons,  or  by  mak- 
ing promises  or  representations  to  third  persons  calculated  to 
induce  them  to  change  their  legal  relations. 

"  Vested  with  authority "  includes  authority  acquired 
through  the  will  of  the  principal  or  by  operation  of  law,  and 
authority  acquired  either  prior  to  or  subsequent  to  the  per- 
formance of  the  representative  act. 

A  servant  is  a  representative  vested  with  authority  to  per- 
form operative  acts  for  his  master  not  creating  new  primary 
obligations,  or  bringing  third  persons  into  contractual  relations 
with  the  master,  or  otherwise  causing  them  to  change  their 
legal  position.  A  master  comes  under  obligations  to  third 
persons  by  the  act  of  his  servant  only  when  the  servant 
commits  a  breach  of  the  master's  primary  obligations  and 
thus  creates  secondary  substituted  obligations. 

"  Vested  with  authority  "  means  here  the  same  as  in  the 
preceding  definition.  But  the  authority  in  such  case  must 
be  real,  not  ostensible  merely,  since  no  doctrine  of  estoppel 

^  Applicable  to  the  law  of  principal  and  agent,  and  the  law  of  master 
and  servant. 

^  Applicable  only  to  the  law  of  principal  and  agent. 
^  Applicable  only  to  the  law  of  master  and  servant. 

2 


18  AGENCY. 

is  applicable  except  where  a  third  person  is  induced  to  change 
his  position.  If  he  is  induced  to  change  it  in  consequence  of 
the  ostensible  authority,  then  the  representative  is  an  agent. 

To  put  the  whole  matter  shortly,  an  agent  is  one  really  or 
ostensibly  authorized  to  create  voluntary  antecedent  or  pri- 
mary obligations  for  his  principal  in  I'avor  of  third  persons, 
or  to  acquire  such  obligations  for  his  principal  as  against 
third  persons ;  while  a  servant  is  one  authorized  to  perform 
operative  acts  not  creating  primary  obligations,  but  which 
may  result  in  the  breach  of  antecedent  primary  obligations, 
voluntary  or  involuntary. 

Since  it  is  the  nature  of  the  act  to  be  performed  that  con- 
stitutes the  essential  difference  between  the  two  classes  of 
representatives,  it  follows  that  the  same  rejjresentative  may 
be  both  an  agent  and  a  servant,  and  herein  lies  the  source 
of  much  of  the  confusion  that  prevails  in  the  discussion  of  the 
law  of  representation.  It  is  often  said  that  the  distinction 
lies  in  the  fact  that  an  agent  is  vested  with  discretion,  while 
a  servant  is  not.^  But  this  is  obviously  incorrect.  A  railway 
conductor  is  not  an  agent  merely  because  he  is  vested  with  a 
wide  discretion  as  to  the  management  of  his  train  ;  he  may  or 
may  not  be  a  vice-master,  but  he  is  a  servant  so  long  as  his 
authority  is  to  do  an  act  not  resulting  in  contractual  obliga- 
tion ;  if  vested  with  authority  to  engage  employees  or  make 
contracts  of  carriage  then  for  that  purpose  he  is  an  agent  and 
not  a  servant,  since  his  act  results  in  the  creation  of  a  con- 
tractual obligation.  So  a  representative  authorized  to  sell  a 
horse  to  a  specified  person  at  a  specified  price  for  cash  is  not 
a  servant  merely  because  he  has  no  discretion  as  to  the  terms 
of  the  sale  ;  his  act  results  in  a  contractual  obligation,  and 
he  is  therefore  an  agent ;  if,  however,  he  is  vested  with  autlior- 
ity  to  drive  the  horse  to  a  designated  place,  he  is  a  servant  in 
the  performance  of  that  duty,  and  if  he  drive  the  horse  negli- 
gently to  the  injury  of  A.,  the  master  becomes  liable  in  tort 
for  the  damage.^ 

^  28  Am.  L.  Rev.  9,  22,  citing  Chicago,  &c.  R.  Co.  v.  Ross,  112  U.  S. 
377,  390. 

'  "The  great  and  fmitlainental  {listiiiction  between  a  servant  and  an 


INTRODUCTION.  19 

§  7.     Classification  of  agents  and  servants. 

Agents  are  often  classified  as  universal  agents,  general 
agents,  and  special  agents. 

A  universal  agent  is  said  to  be  one  authorized  to  transact 
for  his  princijial  any  and  all  business  which  can  be  done 
through  a  representative.  Such  agencies  are  rather  theoreti- 
cal than  practical,  and  a  universal  agent  is,  at  most,  a  "gen- 
eral agent"  in  the  superlative  degree.  We  may,  therefore, 
disregard  this  class  of  agents. 

A  general  agent  is  said  to  be  (a)  one  authorized  to  act  for 
his  principal  in  all  matters  (universal  agent),  or  in  all  matters 
connected  with  a  particular  trade  or  business,  or  in  all  mat- 
ters of  a  particular  nature,  or  (b)  one  whose  business  or  pro- 
fession it  is  to  transact  for  any  or  all  persons  a  particular  kind 
of  business,  as  a  factor,  broker,  auctioneer,  lawyer,  etc.^ 

A  special  agent  is  said  to  be  one  authorized  to  act  for  his 
principal  in  only  a  single,  specific  transaction,  such  act  or 
transaction  not  being  in  the  ordinary  course  of  a  trade  or  pro- 
fession which  he  is  followino-.^ 

Many  refinements  as  to  the  liability  of  a  principal  have 
been  built  upon  the  distinction  between  general  agents  and 
special  agents.  The  distinction,  however,  is  a  vague  one  and 
often  leads  to  more  confusion  than  it  cures.  To  begin  with, 
writers  do  not  agree  as  to  the  distinction  itself,  much  less  as 
to  its  legal  effects.  One  writer  makes  the  distinction  to  con- 
sist in  the  extent  of  the  representation ;  that  is,  if  the  agent 
represents  the  principal  in  a  single  transaction,  he  is  a  special 

agent  is,  that  the  former  is  principally  employed  to  do  an  act  for  the  em- 
ployer, not  resulting  in  a  contract  between  the  master  and  a  third  person, 
while  the  main  office  of  an  agent  is  to  make  such  contract.  Servants 
may  make  contracts  incidentally,  while  agents  may  in  the  same  way 
render  acts  of  service.  The  principal  distinction  between  them,  however, 
is  as  above  stated."  —  Dwight,  Persons  and  Pers.  Prop.  p.  323.  See 
Singer  Mfg.  Co.  v.  Rahn,  132  U.  S.  518;  Hand  r.  Cole,  88  Tenn.  400; 
Jones  V.  Avery,  50  Mich.  326. 

1  Sometimes  (a)  is  given  as  the  correct  definition,  sometimes  (b),  and 
sometimes  both  (a)  and  (b). 

2  Sometimes  the  definition  is  given  with,  and  sometimes  without,  the 
last  qualifying  phrase. 


20  AGENCY. 

agent,  while  if  he  represents  him  in  all  business  dealings  of  a 
particular  kind,  he  is  a  general  agent.^  Another  writer  finds 
the  distinction  in  the  source  of  the  discretionary  power.  If 
the  agent's  powers  arc  fixed  by  the  terms  of  his  appointment, 
he  is  a  special  agent,  while  if  his  powers  are  fixed  by  custom 
and  usage,  he  is  a  general  agent."''  Clearly  it  would  be  of  the 
first  importance  to  know  which  of  these  views  is  correct  if 
anything  depended  upon  the  distinction,  for  they  are  irrecon- 
cilable. If  a  principal  entrusted  a  cargo  of  wheat  to  a  factor 
to  sell,  the  agent  would  be  a  special  agent  under  the  first  view, 
but  a  general  agent  under  the  second.  If  a  principal's  liabil- 
•ity  depends  upon  the  solution  of  the  question  whether  the 
agent  is  special  or  general,  the  conclusions  reached  would  be 
exactly  opposed  to  each  other.  As  we  shall  see  later,  the 
question  of  the  principal's  liability  can  be  determined  without 
involving  it  in  the  solution  of  this  preliminary  question,^  The 
terms  special  agent  and  general  agent  may  therefore  be  dis- 
regarded except  as  terms  of  convenience  to  indicate  broadly 
the  scope  of  the  agency.  The  liability  of  a  principal  for  the 
acts  of  his  agent  depends  upon  the  ostensible  authority  which 
he  has  conferred:  in  determining  this  it  is  often  necessary  to 
inquire  whether  the  agent  has  really  or  apparently  been  en- 
trusted with  the  conduct  of  a  business  generally,  whether  he 
is  an  agent  whose  powers  are  fixed  by  the  customs  of  a  trade 
or  profession,  or  whether,  not  following  a  customary  trade  or 
profession,  he  has  been  engaged  to  carry  out  a  single  or  par- 
ticular transaction.*  As  a  convenient  method  of  indicating 
briefly  the  distinction  between  agents  transacting  a  general 
business  for  the  principal,  or  following  a  customary  trade  or 
profession,  and  agents  transacting  a  particular  item  of  busi- 
ness for  the  principal,  and  not  following  a  customary  trade  or 
profession,  the  terms  general  agent  and  special  agent  may, 
perhaps,  serve  some  useful  purpose  ;  but  this  can  only  be  if  all 
who  use  the  terms  affix  to  them  the  same  significance. 

^  Mechem  on  Agency,  §  6;  Story  on  Agency,  §  17:  Butler  v.  Maples, 
9  Wall.  (U.  S.)  766. 

2  Holland,  Jurisp.  (9tli  ed.)  p.  200;  Dwiglit,  1  Col.  Law  T.  81. 
»  7^6/,  §  104.  *  Post,  §  106. 


INTRODUCTION.  21 

Agents  are  also  divided  into  del  credere  agents,  or  those 
who  guarantee  their  principals  against  the  default  of  those 
with  whom  contracts  are  made,  and  agents  not  del  credere,  or 
those  who  do  not  guarantee  credits.^ 

Special  names  are  also  applied  to  certain  classes  of  agents, 
as,  attorneys-at-law,  auctioneers,  brokers,  factors  or  commis- 
sion merchants,  shipmasters,  cashiers,  etc.^ 

Servants  are  also  divided  into  various  classes,  as,  general 
managers,  superior  officers,  vice-principals,  fellow-servants, 
etc.^ 

§  8.     Division  of  the  subject  of  agency. 

The  law  of  agency  is  divided  into  the  law  of  principal  and 
agent  and  the  law  of  master  and  servant,  as  already  explained. 
Under  each  of  these  two  heads  agency  may  be  treated  from 
three  quite  distinct  points  of  view.  First,  it  may  be  treated 
as  a  contract  between  principal  and  agent  or  master  and  ser- 
vant, and  inquiry  may  be  directed  to  the  ascertainment  of  the 
terms  and  legal  effects  of  this  contract.  Second,  it  may  be 
treated  as  a  means  to  the  formation  of  new  relations  between 
the  principal  and  third  parties,  or  as  a  means  for  the  carrying 
out  of  operative  acts  for  the  master  that  may  result  in  harm 
to  third  parties,  and  inquiry  may  be  directed  to  the  legal 
effects  of  the  employment  of  such  instrumentalities.  Third, 
it  may  be  treated  as  a  means  of  bringing  the  agent  or  servant 
into  contact  with  third  parties,  and  inquiry  may  be  directed 
to  relations  which  the  agent  may  personally  establish  in  act- 
ing for  the  principal,  or  in  excess  of  authority,  and  harm  which 
the  servant  may  occasion  or  suffer  in  acting  for  the  master  or 
in  excess  of  authority. 

The  first  view  of  the  subject  presents  no  special  difficulties, 
since  the  contract  obligations  are  created  by  two  parties  in 
person,  and  the  usual  doctrines  of  contracts  for  personal  ser- 
vice are  applicable.  This  part  deals,  therefore,  with  the  for- 
mation, termination,  and  legal  effects  of  contracts  of  agency 
or  service. 

The  second  view  is  the  one  which  makes  necessary  a  special 

1  Post,  §  06.  2  pos^  §  110  e<  seq.  »  Post,  §  270. 


22  AGENCY. 

treatment  of  tlie  law  of  agency,  —  first,  because  an  agency  may 
be  created  otherwise  than  by  contract  between  the  constituent 
and  the  representative,  and  second,  because  a  constituent, 
whose  will  is  thus  represented,  may  be  made  liable  to  third 
persons  in  cases  where  the  representative  proves  careless,  in- 
competent, or  perverse,  and  even  where  he  acts  in  direct  oppo- 
sition to  the  express  commands  of  the  constituent. 

The  third  view  is,  in  a  sense,  subordinate  to  the  second,  for 
in  cases  where  the  representative  acts  as  for  himself  and  not 
for  his  constituent,  or  where  he  acts  in  excess  of  authority,  or 
wrongfully,  he  may  incur  legal  obligations  to  third  persons  as 
well  as  to  his  constituent,  and  may,  in  some  cases,  acquire 
legal  rights  against  third  persons.  The  subject  of  agency  is 
therefore  divided,  logically,  into  two  great  parts : 

(I.)  The  law  of  principal  and  agent ; 

(IT.)  The  law  of  master  and  servant. 

Each  of  these  parts  is  divided  into  four  parts : 

(1)  The  formation  of  the  relation,  either  as  regards  obliga- 
tions subsisting  between  constituent  and  representative,  or  as 
regards  the  authority  of  the  representative  to  act  for  the  con- 
stituent. Incidental  to  this  is  the  subject  of  the  termination 
of  the  relation. 

(2)  The  mutual  rights  and  obligations  of  the  constituent 
and  representative  as  to  each  other. 

(3)  The  mutual  rights  and  obligations  of  the  constituent 
and  third  persons  growing  out  of  the  exercise  of  authority  by 
the  representative. 

(4)  The  mutual  rights  and  obligations  of  the  representative 
and  third  persons  arising  from  the  acts  of  the  representative. 


PART    I. 

FORMATION  AND    TERMINATION  OF   THE  RELATION    OF 
PRINCIPAL   AND   AGENT. 

§  9.     Introductory. 

The  inquiry  whether  the  relation  of  principal  and  agent 
has  been  formed  or  exists  may  arise  either  in  a  controversy 
between  the  principal  and  agent,  or  between  the  principal 
and  some  third  person  with  whom  the  agent  has  dealt,  or 
between  the  agent  and  such  third  person.  To  avoid  useless 
repetition,  this  part  of  the  work  will  therefore  discuss  the 
formation  of  the  relation  as  concerns  any  one  or  all  of  these 
possible  cases.  For  the  one  or  the  other  of  these  purposes 
the  relation  may  be  formed  in  any  one  of  four  ways:  (1)  by 
agreement;  (2)  by  ratification  ;  (3)  by  estoppel;  (4)  by  neces- 
sity. In  addition  to  a  consideration  of  the  methods  of  form- 
ing the  relation,  this  part  will  also  discuss  the  methods  by 
which  the  relation  may  be  terminated. 

The  problem  of  whether  the  relation  has  been  established 
as  between  the  principal  and  third  persons  involves  the  doc- 
trines of  ostensible,  as  distinguished  from  actual,  agency,  doc- 
trines more  fully  treated  under  the  head  of  estoppel. 

It  should  also  be  noted  that  much,  but  not  all,  of  what 
follows  is  applicable  to  the  formation  of  the  relation  of  master 
and  servant.  Accordingly  some  cases  cited  have  to  do  with 
master  and  servant  so  far  as  concerns  the  formation  of  the 
relation  of  employer  and  employee. 


2-4  FORMATION   OF   AGENCY 


CHAPTER  11. 

FORMATION    OF   THE    RELATION    BY    AGREEMENT. 

§  10.     Elements  of  agreement. 

Agrecinent  is  a  broader  term  than  contract.  It  implies, 
however,  an  offer  and  acceptance,  or  a  meeting  of  the  minds, 
or  manifestation  of  the  meeting  of  the  minds,  of  the  parties.^ 
Accordingly  an  agency  by  agreement  is  one  where  the  princi- 
pal and  agent  mutually  consent  to  the  formation  of  the  rela- 
tion. Such  an  agreement  may  amount  to  a  contract,  or  it 
may  fall  short  of  contract.  If  it  amount  to  a  contract,  it  is 
binding  as  between  principal  and  agent,  and  when  acted  upon 
may  bind  the  principal  to  third  persons  or  third  persons  to 
the  principal.  If  it  falls  short  of  contract,  it  will  not  bind 
the  principal  and  agent  as  a  contractual  obligation,  but  is 
good  as  an  appointment  of  an  agent,  and  if  acted  upon  by 
the  agent  under  such  appointment  may  bind  the  principal  to 
third  persons  or  third  persons  to  the  princii)al,  and  may 
render  the  agent  liable  to  the  principal  for  misfeasance. 

The  assent  of  the  principal  may  be  express  or  implied,  and, 
as  to  third  persons,  it  may  rest  upon  a  holding  out  giving  rise 
to  an  estoppel  to  deny  the  assent.^  It  may  be  subsequent  to 
the  act  of  the  agent  and  amount  to  ratification.*^ 

The  assent  of  the  agent  may  be  express  or  implied.  It  is 
implied  whenever  he  undertakes  to  act  for  another;  and  his 
conduct,  in  so  acting  for  or  on  behalf  of  another,  may  give  rise 
to  an  estoppel  to  deny  the  agency.* 

Under  the  head  of  agency  by  agreement,  we  have  then  to 
consider,  (1)  agency  by  contract,  and  (2)  agency  by  agree- 
ment falling  short  of  contract. 

1  Huffcut's  Anson  on  Cont.  p.  2.        2  p^^f^  §§  50^  io3. 

•  Post,  §  30  et  seq.  *  Fvoberts  i-.  Ogilby,  9  Price,  269. 


BY  AGREEMENT.  25 

1.     Agency  hy  Contract. 

§  11.    Elements  of  contract. 

A  contract  of  agency  (that  is,  a  contract  binding  as  between 
the  principal  and  agent)  must  possess  all  the  essential  ele- 
ments of  any  enforceable  contract,  namely,  true  agreement, 
consideration,  competent  parties,  legality  of  object,  and  in 
some  cases  a  particular  form.^  Most  of  these  elements  call 
for  no  special  discussion,  as  they  differ  in  the  contract  of 
agency  in  no  essential  particular  from  the  like  elements  in 
any  contract  known  to  the  law.  Some  special  points  of  diffi- 
culty may  be  briefly  noted. 

§  12.     Agreement,  forms  of. 

The  agreement  between  the  principal  and  agent  may  take 
any  one  of  three  forms :  the  offer  of  a  promise  for  an  act ; 
the  offer  of  an  act  for  a  promise ;  the  offer  of  a  promise  for  a 
promise.^ 

The  first  case  is  where  the  principal  promises  remuneration 
if  the  agent  will  render  a  service.  The  promise  may  be  ex- 
press, or  it  may  be  an  implied  promise  to  pay  what  the  ser- 
vices are  reasonably  worth.  An  express  agreement  controls  ;  ^ 
in  its  absence  an  implied  agreement  may  be  inferred.  Strictly 
the  promise  would  be  offered  for  the  act  only  when  there  was 
a  request  that  the  act  be  done.^  And  even  in  sucli  a  case  the 
circumstances  may  negative  any  implication  that  the  services 
were  to  be  paid  for.^  Such  is  the  result  where  the  services  are 
rendered  by  one  member  of  a  family  at  the  request  of  another.^ 

The  second  case  is  where  the  agent  offers  a  service  which 
the  principal  accepts.  The  acceptance  may  be  by  express 
words,  stating  the  terms,  in  which  case  the  express  promise 
would  control ;  or  it  may  be  by  conduct,  in  which  case  there 
is  an  implied  promise  to  pay  what  the  services  are  reasonably 

^  Huffcut's  Anson  on  Cont.  p.  12  et  seq. 
2  Huffcut's  Anson  on  Cont.  pp.  402-403. 
8  Wallace  v.  Floyd,  29  Pa.  St.  184. 
*  Van  Arman  r.  Byington,  38  lU.  443. 
6  Scott  V.  Maier,  56  Mich.  554. 
6  Hall  V.  Finch,  29  Wis.  278. 


26  FORMATION   OF  AGENCY 

wurtli.^  The  test  is  as  to  whether  a  reasonable  man  would 
understand  that  the  agent  expected  to  be  paid  for  his  services. 
It  is  because  reasonable  men  understand  that  services  rendered 
by  one  member  of  a  family  for  another  are  generally  gratuitous 
that  an  offer  of  an  act  by  the  one,  accepted  by  the  other,  raises 
no  promise  to  pay.^  Of  course  if  the  offer  of  the  act  is  not 
communicated  to  the  principal  until  after  it  is  performed,  and 
he  has  therefore  had  no  opportunity  either  to  accept  or  reject 
it,  he  would  not  be  bound  without  a  ratification.^ 

The  third  case  is  that  of  a  promise  for  a  promise,  namely,  an 
express  contract  by  which  the  agent  promises  to  perform  the 
service,  and  the  principal  to  pay  for  it.  In  this,  and  the  other 
cases,  it  is  necessary  as  between  employer  and  employee  that 
the  agreement  be  real,  that  is,  free  from  mistake,  misrepre- 
sentation, fraud,  or  duress.  As  between  the  employer  and 
third  person,  the  authority,  if  exercised,  binds  the  employer. 

§  13.     Consideration. 

Consideration  consists  in  a  benefit  to  the  promisor  or  a 
detriment  to  the  promisee.  It  is  as  necessary  to  tlve  contract 
of  agency  as  to  contracts  generally.  The  only  case  calling 
for  special  mention  is  where  the  services  have  been  rendered 
gratuitously,  and  there  is  a  subsequent  promise  to  pay  for 
them.  Generally  speaking  there  would  be  no  consideration 
for  the  subsequent  promise,  since,  there  being  no  prior  legal 
obligation,  the  case  would  be  one  of  past  consideration,  which 
will  not  support  a  promise.*  Cases  which  seem  to  hold  to  the 
contrary  arc  those  in  which  there  was  cither  a  previous  re- 
quest, express  or  implied,  or  where  the  services  were  rendered 
under  such  circumstances  as  not  to  be  deemed  gratuitous, 
and  the  subsequent  promise  merely  fixes  expressly  the  value 
of  the  services.^ 

1  Muscott  I'.  Stubbs,  24  Kans.  .520 ;  McCrary  v.  Ruddick,  '33  Towa,  521. 

2  Hertzog  v.  Hertzog,  29  Pa.  St.  4G5;  Hall  v.  Fincli,  29  Wis.  278. 

«  Bartholeinew  v.  Jackson,  20  Johns.  (N.  Y.)  28;  James  v.  O'Diiscoll, 
2  Bay  (S.  C),  101. 

*  Allen  V.  Bryson,  67  Iowa,  591. 

6  Dearborn  v.  Bowman,  3  Mete.  (IMass.)  155;  Hicl.s  v.  Burhans,  10 
Johns.  (N.  Y.)  243;  Wilson  v.  Edmonds,  24  N.  H.  517. 


BY  AGREEMENT.  27 

But  while  gratuitous  services  may  raise  no  promise  to  com- 
pensate, a  promise  to  perform  a  gratuitous  service,  followed 
by  an  actual  performance,  in  whole  or  in  part,  may  be  en- 
forceable to  the  extent  of  rendering  the  agent  liable  for  negli- 
gence. But  whether  this  is  on  the  ground  of  contract  or  tort, 
is  not  clear.i  Moreover,  as  to  third  persons,  the  question 
whether  there  is  any  consideration  as  between  employer  and 
employee  is  immaterial. 

§  14.     Parties,  —  competency  of,  generally. 

Generally  speaking,  parties  competent  to  make  any  con- 
tract are  competent  to  make  a  contract  of  agency.^  As  be- 
tween the  principal  and  agent  this  rule  is  well  enough,  but  as 
between  the  principal  and  third  persons  it  calls  for  further 
examination  and  modification.  On  the  one  hand,  we  have  to 
inquire  whether  an  incompetent  person,  as  a  lunatic  or  an 
infant,  can  make  a  contract  through  a  competent  agent ;  on 
the  other,  whether  a  competent  person  can  make  a  contract 
through  an  incompetent  agent.  This  discussion  is  applicable 
to  cases  of  gratuitous  agency  and  of  ratification,  as  well  as  to 
cases  of  agency  by  contract. 

§  15.     Parties.  —  Infant  principals. 

It  is  sometimes  said  that  all  contracts  of  an  infant  are 
voidable  except  two,  —  the  contract  for  necessaries,  which  is 
binding,  and  the  contract  for  the  appointment  of  an  agent, 
which  is  void.^  It  is  the  last  proposition  which  calls  for 
special  notice. 

If  an  infant,  by  contract  or  otherwise,  appoints  an  agent, 
and  this  agent  makes  a  contract  with  X.  in  behalf  of  the 
infant  principal,  is  the  contract  so  made  void  or  voidable  ? 
If  the  appointment  of  the  agent  is  a  void  act,  then  obviously 
no  legal  results  can  flow  from  it,  and  the  contract  with  X. 
must  likewise  be  void.  If  void,  it  could  not  be  ratified  by  any 
subsequent   act   of   the   principal.^     There    are   many   cases 

1  Thorne  i'.  Deas,  4  Johns.  (N.  Y.)  84.     See  post,  §  29. 

2  See  generally  Huffcut's  Anson  on  Cont.  Pt.  II.  Ch.  iii. 
8  Fetrow  v.  Wiseman,  40  Ind.  148,  155. 

*  Post,  §  41. 


28  FORMATION    OF    AGENCY 

wliich  make  the  sweeping  statement  of  the  law  that  the 
ai>pointuK'nt  of  an  agent  by  an  infant  is  a  void  act,  and  that 
the  acts  done  by  the  agent  in  behalf  of  the  principal  are  likewise 
void.^  But  these  authorities  are  in  most  cases  based  upon  the 
app«jintment  of  an  attorney  by  formal  warrant  of  attorney, 
and  the  rule  to  be  deduced  from  them  is  that  the  formal 
power  or  warrant  of  attorney  by  an  infant,  not  conveying  a 
present  interest,  is  void.-  The  American  cases  show  a  decided 
tendency  to  confine  the  rule  to  this  class  of  cases,  and  to  hold 
that  the  appointment  of  agents  by  an  infant  generally,  is  a 
voidable  and  not  a  void  act.^  Yet  there  is  authority  for  the 
broader  rule  that  the  appointment  of  any  agent  by  an  infant 
is  void.*  It  is  admitted  that  the  exception,  if  it  be  one,  is  not 
founded  on  any  intelligible  principle,  and  the  tendency  to  con- 
fine it  within  the  narrow  limits  of  formal  powers  of  attorney 
is  likely  to  prevail.^  "  The  courts  have,  from  time  to  time, 
made  so  many  exceptions  to  the  exception  itself  that  there 
seems  to  be  very  little  left  of  it,  unless  it  be  in  cases  of  powers 
of  attorney  required  to  be  under  seal,  and  warrants  of  attorney 
to  appear  and  confess  judgment  in  court."  ^ 

§  16.     Parties. — Insane  principals. 

The  generally  accepted  rule  in  England  as  to  the  effect 
of  insanity  upon  contracts  is  that  "  a  defendant  who  seeks 
to  avoid  a  contract  on  the  ground  of  his  insanity,  must  plead 
and  prove,  not  merely  his  incapacity,  but  also  the  plaintiff's 
knowledge  of  that  fact,  and  unless  he  proves  these  two  things 

1  Philpot  V.  Bingham,  5.5  Ala.  435;  Knox  v.  Flack,  22  Pa.  St.  3.37; 
Bennett  v.  Davis,  6  Cow.  (X.  Y.)  393. 

2  Lawrence  v.  McArter,  10  Ohio,  37 ;  Waples  r.  Hastings,  3  Harr.  (Del  ) 
403. 

8  Patterson  v.  Lippincott,  47  N.  J.  L.  457;  Towle  v.  Dresser,  73  Me. 
2.j2;  Hardy  v.  Waters,  38  Me.  450;  Hastings  v.  Dollarhide,  24  Cal.  195; 
Whitney  v.  Dutch,  14  Mass.  457. 

*  Trueblood  v.  Trueblood,  8  Ind.  195;  Armitage  v.  Widoe,  30  :Mich. 
124. 

«  Cases  supra  ;  Moley  v.  Brine,  120  Mass.  324  ;  Fairbanks  v.  Snow,  145 
Mass.  153. 

«  Mitchell,  J.,  io  Coursolle  v.  Weyerhauser,  69  Minn.  328,  333. 


BY   AGREEMENT.  29 

he  cannot  succeed."  ^  In  the  United  States  the  authorities 
are  in  confusion,  but  the  following  principles  are  supported 
by  abundant  and  perliaps  decisive  authority :  (1)  Where  the 
sane  person  does  not  know  of  the  other  party's  insanity,  and 
there  has  been  no  judicial  determination  of  such  insanity, 
and  the  contract  is  so  far  executed  that  the  parties  cannot  be 
put  in  statu  quo,  the  contract  is  binding  on  the  lunatic,^ 
(2)  Conversely,  the  contract  is  voidable  if  the  sane  party 
knew  of  the  other's  insanity  ;^  if  the  lunatic  had  in  fact  been 
adjudged  insane,  whether  the  sane  party  knew  such  fact  or 
not ;  *  if  the  contract  is  bilateral,  or  if  the  sane  party  can  be 
put  in  statu  quo.^  (3)  The  contract  is  void  if  the  statute 
provides  that  contracts  by  lunatics  shall  be  void,^  or  if  it 
provides  that  contracts  by  lunatics  under  guardianship  shall 
be  void ; '  and  in  some  jurisdictions  the  doctrine  of  void 
contracts  is  pushed  beyond  statutory  limits  in  case  of  deeds, 
and  all  deeds  of  insane  persons  under  guardianship  are  held 
void  ;^  there  is  also  high  authority  to  the  effect  that  a  power 
of  attorney  by  a  lunatic  is  absolutely  void.^ 

The  application  of  these  principles  to  the  contract  of  agency 
would  support  these  propositions.  As  between  the  principal 
and  agent  the  contract  would  be  voidable  if,  when  it  was 
formed,  the  principal  had  been  adjudged  insane,  or  the  agent 

1  Lopes,  L.  J.,  in  Imperial  Loan  Co.  v.  Stone,  1892, 1  Q.  B.  599 ;  Drew 
V.  Nunn,  L.  R.  4  Q.  B.  D.  661. 

•■^  Gribben  v.  Maxwell,  34  Kans.  8;  Young  v.  Stevens,  48  N.  H.  133; 
Mutual  Life  Ins.  Co.  v.  Hunt,  79  N.  Y.  541. 

8  Crawford  v.  Scovell,  94  Pa.  St.  48. 

4  Inquisitions  to  ascertain  facts  of  public  interest  are  analogous  to 
proceedings  in  rem,  and  so  conclusive  on  all  the  world.  Wadsworth  v. 
Sharpsteen,  8  N.  Y.  388,  392;  Carter  v.  Beckwith,  128  N.  Y.  312. 

5  Burnham  v.  Kidwell,  113  IlL  425.  See  Wirebach  v.  First  Nat.  Bk., 
97  Pa.  St.  543. 

^  This  is  sometimes  the  case  as  to  deeds.  Ind.  Rev.  St.  (1881)  §  2917; 
Ga.  Code,  §  2735. 

T  Cal.  Civ.  Code,  §§  38-40;  Dak.  Civ.  Code,  §§  2519-2521. 

8  Van  Deusen  v.  Sweet,  51  N.  Y.  378;  Gibson  v.  Soper,  6  Gray 
(Mass.),  279;  Rogers  v.  Blackwell,  49  Mich.  192;  Hovey  v.  Hobson,  53 
Me.  451. 

9  Dexter  v.  Hall,  15  Wall.  (U.  S.)  9. 


30  FORMATION   OF   AGENCY 

knew  he  was  in  fact  insane.  It  would  be  void  if  the  statute 
declared  contracts  of  insane  persons  void,  and,  it  would  seem, 
if  it  was  created  by  power  of  attorney.  It  would  be  binding 
if  the  insane  person  had  not  been  so  adjudged  and  the  agent 
made  the  contract  in  good  faith,  iguorant  of  the  insanity  ;  at 
least  it  would  be  binding  so  far  as  acted  upon  by  the  agent. 

As  between  the  principal  and  third  parties  the  same  result 
would  follow.  Knowledge  of  the  iusanity,  or  the  absolute 
notice  arising  from  its  judicial  determination,  would  make 
the  contract  voidable.  But  absence  of  both  knowledge  and 
notice  would  make  it  binding,  at  least  in  all  cases  where  the 
contract  has  been  acted  upon.  But  what  of  the  case  where 
the  agent  knows  his  principal  is  insane  ?  If  the  principal  is 
sane  when  the  agent  is  appointed,  but  subsequently  becomes 
insane  to  the  knowledge  of  the  agent,  but  unknown  to  the 
third  party,  the  contract  is  binding.^  This  is  put  on  the 
ground  that  the  principal  when  sane  represents  the  agent  aa 
having  authority,  and  third  persons  may  act  on  the  represen- 
tation until  they  have  notice  of  its  withdrawal.  It  is  a  case 
where  one  of  two  innocent  parties  must  suffer  by  the  wrong- 
ful act  of  the  agent,  and  the  loss  should  fall  on  the  one  whose 
representation  is  the  proximate  cause  of  the  injury.^ 

§  17.     Parties. — Married  women  as  principals. 

A  married  woman  could  make  no  binding  contract  at  com- 
mon law.  All  her  contracts  were  absolutely  void.  Modern 
statutes,  however,  have  gone  far  to  remove  her  common  law 
disabilities,  and  she  may  now  contract  in  some  jurisdictions 
as  freely  as  an  unmarried  woman.  To  the  extent  that  she 
may  contract  generally  in  her  own  person  she  may  contract 
through  an  agent,^  but,  of  course,  to  no  greater  extent.*  If 
she  may  contract  through  an  agent,  she  is  liable  on  doctrines 

1  Drew  V.  Nunn,  L.  R.  4  Q.  B.  D.  6G1;  Davis  l:  Lane,  10  N.  II.  156; 
Matthies.sen,  &c.  Co.  v.  McMahon's  Adm'r,  38  N.  J.  L.  536. 

2  .\.s  to  termination  of  agency  by  insanity,  see  post,  §  71. 

3  Weisbrod  c   Chicago,  &c.  R  ,  18  Wis.  35. 

*  Kenton  Ins.  Co.  i:  McClelhui,  43  Mich.  564;  Nash  u.  Mitchell,  71 
N.  Y. 199. 


BY   AGREEMENT.  31 

of  estoppel  for  ostensible  authority,  the  same  as  any  other 
person.^  Some  early  statutes  giving  married  women  the 
power  to  convey  their  lands  by  deed,  but  not  otherwise 
enlarging  their  contractual  capacity,  were  strictly  construed 
so  as  to  require  an  execution  of  deeds  in  person  and  not 
through  an  attorney  ;  under  these  statutes  it  was  held  that  a 
married  woman  could  not  appoint  an  attorney  to  do  what  she 
might  do  in  person.^  In  general  a  married  woman  may  now 
appoint  an  agent  and  may  appoint  her  husband  as  agent.^ 
Even  where  she  could  not  have  an  agent,  it  seems  she  could 
have  a  servant  to  care  for  her  estate  for  whose  operative  acts 
she  would  be  liable.* 

§  18.     Parties.  —  Corporations  as  principals. 

A  corporation  has  the  powers  expressly  conferred  by  its 
charter  or  impliedly  necessary  to  carry  into  effect  the  provi- 
sions of  that  instrument.  The  corporate  charter  usually 
confers  an  express  power  to  appoint  agents,  but  even  in  the 
absence  of  such  provisions  the  power  is  implied,  both  as  to 
the  official  agents  through  whom  a  corporation  must  act,  and 
also  as  to  the  inferior  agents  who  may  be  employed  at  the 
discretion  of  the  managers.^  But  the  appointment  of  an 
agent  in  excess  of  these  powers  would  be  a  void  act,  not 
binding  on  the  corporation  so  far  as  the  agent  is  concerned, 
though  if  the  corporation  had  had  the  benefit  of  his  services 
he  might  recover  in  quantum  meruit.^  Whether  authority  to 
affix  the  corporate  seal  must  be  under  seal  is  discussed 
hereafter.'^ 

1  Bodine  v.  Killeen,  53  N.  Y.  93. 

2  Sumner  v.  Conant,  10  Vt.  9  ;  Eaile  v.  Earle,  20  N.  J.  L.  347. 
8  VVeisbrod  v.  Chicago,  &c.  R.,  18  Wis.  35. 

*  Flesh  V.  Lindsay,  115  Mo.  1. 

*  Protection  Life  Ins.  Co.  v.  Foote,  79  111.  361 ;  Hurlbut  v.  Marshall, 
62  Wis.  590;  Washburn  v.  Nashville,  &c.  R.  R.  Co.,  3  Head  (Tenn.),  638; 
St.  Andrew's  Bay  Land  Co.  v.  Mitchell,  4  Fla.  192. 

*  Slater  Woollen  Co.  v.  Lamb,  143  Mass.  420.  Query  as  to  the  result 
where  the  appointment  of  the  agent  was  ultra  vires,  but  the  conti'act  made 
by  him  with  a  third  person  was  intra  vires. 

^  Post,  §  26. 


32  FORMATION   OF   AGENCY 

§  19.     Parties.  —  Partnerships  as  principals. 

In  a  partnership  each  niember  is  usually  a  principal  and 
also  an  agent  in  the  management  of  the  partnership  affairs. 
As  agent  each  partner  has  the  authority  necessary  for  carry- 
ing on  the  partnership,^  and  among  other  powers  he  has  the 
power  to  api)oint  agents  to  carry  out  the  ))urposes  for  which 
the  partnership  exists.^  But  if  the  ajipointment  he  to  do  an 
act  which  the  partner  could  not  do  himself  without  special 
authorization  from  his  co-i)artnei-s,  the  appointment  will  not 
bind  the  firm.^  And  if  the  a])pointment  recjuires  to  be  made 
under  seal  it  cannot  be  made  except  by  the  joint  act  of  all 
the  partners;  but  adding  a  seal  to  an  instrument  where  none 
is  necessary  will  not  bring  the  appointment  within  this  rule.* 
Where  all  of  the  partners  have  executed  a  sealed  instrument, 
it  seems  that  parol  authority  to  one  to  fill  in  the  name  of  the 
grantee  is  good.^ 

§  20.     Parties. — Unincorporated  clubs,  etc.,  as  principals. 

Unincorporated  clubs  and  other  voluntary  associations,  as 
churches,  political  organizations,  and  the  like,  are  not  com- 
petent principals  because  they  are  not  legal  entities.  But 
their  members  are  competent  joint  principals,  and  may  be 
held  as  such  if  they  have  acted  jointly  in  the  appointment  of 
an  agent.^  Mere  membership  in  the  club  does  not  make  them 
principals  as  to  contracts  made  by  the  officers  or  committees 
of  the  club;'^  it  must  be  shown  that  they  authorized  the  agent 
of  the  club  to  act  as  their  agent  and  pledge  their  credit.  But 
this  is  a  question  not  of  the  competency  of  the  principal,  but 
of  the  fact  and  extent  of  the  agency.^ 

^  Leake  on  Contr.  (3d  cd.)  p.  451  and  cases  cited. 

2  Tillier  v.  Whitehead,  1  Dull.  (Pa.)  2G9 ;  Lucas  v.  Bank,  2  Stew. 
(Ala.)  280. 

^  Charles  v.  Eshleman,  5  Colo.  107. 

*  Lucas  V.  Bank,  supra  ;  Edwards  v.  Dillon,  147  111.  14. 

'  Cribben  v.  Deal,  21  Ore.  211.  See  Parsons  on  Partnership,  §  122; 
post,  §  26. 

«  Kay  V.  Powers,  134  Mass.  22. 

'  Flemyng  v.  Hector,  2  M.  &  W.  172 ;  Hawke  v.  Cole,  62  L.  T.  Rep. 
N.  8.  6r)8;  Ash  V.  Guie,  97  Pa.  St.  493. 

8  Post,  §  185. 


BY   AGREEMENT.  33 

§  21.     Parties.  —  Aliens  as  principals. 

Aliens  are  generally  as  competent  to  create  an  agency  as 
citizens  or  subjects.  But  an  alien  enemy  cannot,  during  the 
continuance  of  a  state  of  war,  make  any  contract  with  a 
citizen  of  the  United  States  which  involves  any  communica- 
tion across  the  lines  of  hostilities.^  Accordingly  he  cannot 
appoint  an  agent  in  the  United  States  during  the  continuance 
of  the  war.2  But  if  he  have  an  agent  here  at  the  outbreak  of 
the  war,  the  agency  is  not  terminated  or  suspended  for  those 
purposes  not  involving  a  communication  across  the  lines  of 
hostilities,  either  between  the  principal  and  the  agent  or  the 
agent  and  third  persons.^ 

§  22.     Parties.  —  Joint  principals. 

Two  or  more  persons  may  be  jointly  principals  in  a  con- 
tract of  agency.  This  has  already  been  illustrated  in  the 
case  of  partnerships  and  unincorporated  clubs.*  In  the  case 
of  a  partnership  each  partner  represents  his  co-partners  and 
may  bind  them  by  the  appointment  of  an  agent.  But  joint- 
owners  of  property  do  not  stand  in  this  relationship,  and 
each  must  assent  for  himself  to  the  appointment  of  the  agent 
in  order  to  be  bound  as  a  principal.^  If  a  joint  power  be 
given,  it  does  not  authorize  the  agent  to  act  for  one  of  the 
principals  in  matters  affecting  his  individual  interests.^  In 
unincorporated  associations,  not  being  partnerships,  one  mem- 
ber does  not  represent  the  others,  nor  do  a  majority  represent 
a  minority,  except  by  assent." 

1  Kershaw  v.  Kelsey,  100  Mass.  561 ;  United  States  v.  Grossmayer, 
9  Wall   (U,  S.)72. 

2  United  States  v.  Grossmayer,  9  Wall.  72. 

8  Monsseaux  v.  Urquhart,  19  La.  An.  482;  Ward  v.  Smith,  7  Wall. 
(U.  S.)  447. 

*  Atite,  §§19,  20. 

5  Keay  r.  Fenwick,  L.  R.  1  C.  P.  Div-  745;  Perminter  v.  Kelly,  18  Ala. 
716. 

6  Gilbert  v.  How,  45  Minn.  121. 

''  Flemyng  v.  Hector,  2  M.  &  W.  172;  Todd  v.  Enily,  7  M.  &  W.  427; 
Devoss  V.  Gray,  22  Oh.  St.  159;  Newell  v.  Borden,  128  Mass.  31. 

3 


3-4  FORMATION   OF   AGENCY 

§  23.     Parties.  —  Competency  of  agent. 

Any  person  may,  as  to  third  persons,  act  as  an  agcnt,^ 
unless,  perhaps,  one  who  is  too  young  or  too  imbecile  to 
perform  at  all  the  act  in  question.^  So  infants,^  married 
women,^  slaves,^  and  probably  lunatics  and  other  incompet- 
ents maybe  the  channel  of  communication  between  a  principal 
and  one  with  whom  he  deals.  Of  course  the  contract  of 
agency  between  the  principal  and  the  incompetent  is  subject 
to  the  usual  rules  governing  contracts  by  persons  under 
disability,^  and  the  contract  of  warranty  of  authority'^  be- 
tween the  agent  and  the  third  party  would  be  governed  by  like 
considerations. 

As  between  the  agent  and  princijjal,  the  agent  may  be 
disqualified  by  the  fact  that  he  has  an  interest  in  the  subject- 
matter  of  the  agency  adverse  to  that  of  the  principal.^  As 
between  the  principal  and  a  third  person  the  agent  may  be 
disqualified  by  the  fact  that  the  agent  is  secretly  acting  for 
both  of  the  parties  to  the  contract  to  the  knowledge  of  the 
third  person  ;  this  would  amount  to  a  combination  between 
the  agent  and  the  third  party  to  defraud  the  princij)al.^  So 
one  cannot  contract  for  himself  in  person  and  for  another  by 
representation,  that  is  to  say,  an  agent  cannot  contract  with 
himself. 

In  cases  where  the  Statute  of  Frauds  requires  a  writing, 
signed  by  a  party  or  his  agent,  the  agent  contemplated  by 
the  statute,  who  is  to  bind  the  party  to  be  charged  by  signing 

^  Coke  on  Littleton,  52  a. 
^  Lyon  r.  Kont,  45  Ala.  656. 

8  Talbot  V.  Bowen,  1  A.  K.  Marsh.  (Ky.)  436 ;  In  re  D'Angibau,  L.  R. 
15  Ch.  D.  228. 

*  Hopkins  v.  Mollinieux,  4  Wend.  (X.  Y.)  465;  Butler  v.  Trice,  110 
Mass.  97. 

^  Lyon  V.  Kent,  supra ;  Chastain  v.  Bowman,  1  Hill's  So.  Car.  Law. 
270. 

«  Widrig  V.  Taggart,  51  Mich.  103. 
T  Post,  §  90. 

*  Tewksbury  v.  Spruance,  75  111.  187;  Crump  i'.  Ingersoll,  44  Minn. 
84;  Tau.ssig  r.  Hart,  58  N.  Y.  425. 

9  ^Layor,  etc.  of  Salford  v.  Lever,  L.  R.  1891,  1  Q.  B.  168;  City  of 
Boston  V.  Simmons,  150  Mass.  461. 


BY  AGREEMENT.  35 

the  required  memorandum,  must  be  some  third  person  and  not 
the  other  contracting  party .^  An  auctioneer  selling  for  the 
vendor  may  himself,  or  through  his  clerk,  make  the  memoran- 
dum which  will  bind  both  parties.^  So  also  a  broker.^  But 
an  auctioneer's  implied  authority  to  sign  for  the  buyer  is 
confined  to  the  time  of  the  sale  and  cannot  be  exercised  at 
any  later  date.* 

The  law  may  fix  the  qualifications  of  agents,  as  in  the  case 
of  attorneys-at-law,  and  in  such  cases  only  a  duly  licensed 
person  can  act  as  agent.^ 

§  24.     Parties.  —  Joint  agents. 

The  agents  entrusted  with  the  authority  from  the  principal 
may  be  either  several  or  joint.  The  only  question  of 
difficulty  connected  with  a  joint  agency  is  as  to  the  manner 
in  which  it  must  be  executed,  and  that  may  best  be  disposed 
of  at  this  point. 

Where  the  agency  is  joint,  that  is,  where  two  or  more 
persons  are  authorized  jointly  to  act  for  the  principal,  the 
execution  of  the  agency  must  generally  be  joint.^  But 
whether  the  agency  is  joint  or  several  is  a  matter  of  con- 
struction to  be  gathered  from  the  terms  of  the  authority  and 
considerations  of  custom  or  necessity."  Two  cases  are  clear 
in  which  the  agency  though  confided  to  two  or  more  persons 
is  presumed  to  be  several  and  not  joint,  so  that  one  may  act 
for  all :  the  first  is  the  case  of  a  partnership  acting  as  agent,* 

1  Wright  V.  Dannah,  2  Camp.  203 ;  Farebrother  v.  Simmons,  5  B.  & 
Aid.  333. 

2  Bird  V.  Boulter,  4  B.  &  Ad.  443;  Gill  v.  Bickuell,  2  Cush.  (Mass.) 
355. 

3  Butler  V.  Thomson,  92  U.  S.  412  ;  Newberry  v.  Wall,  84  N.  Y.  576; 
Coddington  v.  Goddard,  16  Gray  (Mass.),  436. 

4  Horton  v.  McCarty,  53  Me.'  394. 

8  Cobb  V.  Superior  Court,  43  Mich.  289. 

6  Brown  v.  Andrew,  18  L.  J.  Q.  B.  153;  Commonwealth  lk  Canal  Com- 
missioners, 9  Watts  (Pa.),  466. 

'  Guthrie  v.  Armstrong,  5  B.  &  Aid.  628;  Hawley  v.  Keeler,  53  N.  Y. 
114. 

8  Deakin  v.  Underwood,  37  Minn.  98;  Jeffries  v.  Ins.  Co.,  110  U.  S. 
305. 


36  FORMATION    OF  AGENCY 

and  the  second  is  the  case  where  the  agency  is  a  public  one 
or  one  created  by  hnv ;  ^  or  where  the  agency  is  that  of  direct- 
ors of  a  corporation  or  a  body  of  like  powers.^  In  the  first  of 
these  cases  one  of  the  joint  agents  may  act  for  all,  and  in  the 
second  a  majority  may  decide  for  all,  provided  a  quorum 
meet  and  confer  after  due  notice  to  all.^ 

§  25.    Parties.  —  Sub-agents. 

Sub-agents  may  be  appointed  either,  (1)  by  an  agreement 
between  the  agent  and  the  sub-agent  in  which  the  agent  as  to 
the  sub-agent  is  principal,  or  (2)  by  an  agreement  between 
the  agent  and  the  sub-agent  in  which  the  agent  acts  for  the 
princi})al.  In  the  first  case,  a  privity  of  contract  or  gratu- 
itous relationship  is  created  between  the  agent  and  the  sub- 
agent  ;  in  the  second  case,  a  privity  is  created  between  the 
j)riucipal  and  the  sub-agent,  provided,  of  course,  the  agent, 
was  expressly  or  impliedly  authorized  to  make  such  an  agree- 
ment for  the  employment  of  the  sub-agent  in  behalf  of  his 
principal.'*  This  subject  is  more  fully  discussed  hereafter, 
more  particularly  with  reference  to  the  liability  of  the  princi- 
pal or  agent  for  the  conduct  of  the  sub-agent.^ 

§  26.     Form  of  contract.  —  "Writing  or  seal. 

An  agent  may  be  appointed  by  oral  communication,  by 
writing,  or  by  an  instrument  under  seal.  As  a  general  rule 
the  contract  of  agency  may  be  by  parol.  The  cases  where  it 
must  be  in  writing  or  under  seal  may  be  summarized  as 
follows :  — 

(1)  Where  by  the  terms  of  the  contract  it  is  not  to  be 
performed  within  a  year,  the  contract  is  required  by  the 
Fourth  Section  of  the  English  Statute  of  Frauds  to  be 
in  writing.^     If  the  contract   may  be    performed   within   a 

1  Williams  v.  School  District,  21  Pick.  (Mass.)  75. 

2  McNeil  V.  Boston  Chamlier  of  Commerce,  154  Mass.  277. 

8  r.ank  V.  Town,  .52  Vt.  87 ;  Williams  v.  Scliool  Dist.,  21  Pick.  (:\rass.)  75. 

*  llaluptzok  V.  Great  Northern  Ry.  Co.,  55  Minn.  410;  De  Bus.sche  v. 
Alt,  8  Ch.  Div.  286. 

6  Post,  §§  92-95,  147,  160. 

8  Hinckley  v.  Southgate,  11  Yt.  428;  Tuttle  v.  Swett,  31  Me.  555; 
Board  V.  Howell,  (Ind.)  52  N.  E.  769,  21  Ind.  App.  Ct.  Rep.  495. 


BY   AGKEEMENT.  37 

year,^  or  if  it  expressly  contemplates  a  continf^ency,  as  death, 
which  would  terminate  it  within  a  year,^  it  need  not  be  in  writ- 
ing. Whether  both  parties  must  sign  in  order  to  have  mutual 
obligations  and  thus  avoid  the  defence  of  want  of  mutuality  has 
been  variously  decided,^  but  the  weight  of  authority  seems  to 
be  that  mutuality  is  not  necessary  in  such  cases.* 

(2)  In  some  States  the  Statute  of  Frauds  provides  that, 
where  a  contract  is  required  to  be  in  writing  and  signed  by 
the  party  to  be  charged,  or  his  agent  thereunto  duly  author- 
ized, such  authority  to  the  agent  shall  be  in  writing/^  Unless 
such  express  provision  is  added  in  the  statute,  the  agent  may 
be  appointed  orally  although  he  must  execute  his  authority  in 
writing.^  In  these  cases  an  auctioneer  or  broker  may  act  for 
both  parties  in  signing  the  required  memorandum,  but  one 
party  cannot  act  for  the  other.'^ 

(3)  Where  the  contract  between  the  principal  and  the  third 
party  is  required  to  be  under  seal,  the  authority  of  the  agent 
to  execute  the  instrument  must  itself  be  under  seal.^  A  con- 
tract for  the  sale  of  the  lands  need  not  be  under  seal,  although 
it  must,  under  the  Statute  of  Frauds,  be  in  writing ;  ^  but  a 
conveyance  of  the  lands  must  be  under  seal,  and  the  agent's 
authority  to  execute  the  conveyance  must  also  be  under  seal. 
So  also  an  authority  to  execute  any  specialty,  as  a  bond,  must  be 
evidenced  by  a  sealed  instrument.^^   To  this  rule  there  are  some 

1  Roberts  v.  Rockbottoin  Co.,  7  Mete.  (Mass.)  46;  Russell  v.  Slade, 
12  Conn.  455;  Moore  v.  Fox,  10  Johns.  (N.  Y.)  244;  Scribner  i'.  Flagg 
IMfg.  Co.,  175  Mass.  536. 

2  Riddle  V.  Backus,  38  Iowa,  81 ;  Updike  v.  Ten  Broeck,  32  N.  J.  L. 
105;  Jilson  v.  Gilbert,  26  Wis.  637;  Eiseman  v.  Schneider,  60  N.  J.  L. 
291. 

8  See  Wilkinson  v.  Heavenrich,  58  Mich.  574. 

4  Wood,  St.  of  Frauds,  §  405. 

6  See  Stimson's  Amer.  Statute  Law,  Vol.  I.  §  5201. 

«  Johnson  v.  Dodge,  17  111.  433;  Long  v.  Hartwell,  34  N.  J.  L.  116. 

'  Ante,  §  23. 

8  Berkeley  v.  Hardy,  5  B.  &  C.  355,  8  D.  &  R.  102 ;  Hanford  v.  Mc- 
Nair,  9  Wend.  (N.  Y.)  54;  Gordon  v.  Bulkeley,  14  Serg.  &  R.  (Pa  )  331. 

9  Long  V.  Hartwell,  34  N.  J.  L.  116. 

^°  Gordon  v.  Bulkeley,  supra ;  Hibblewhite  v.  ^McMorine,  6  Mees.  &  W. 
200. 


38  FORMATION   OF   AGENCY 

apparent  exceptions.  First,  if  the  specialty  be  executed  by 
the  agent  in  the  presence  of  the  principal,  the  agent's  author- 
ity need  not  be  under  seal.^  and  the  grantee  may  sign  the 
grantor's  name  provided  the  latter  afterward  acknowledges 
and  delivers  the  deed.'-^  Second,  if  the  seal  is  superfluous  in 
the  sense  that  the  instrument  though  actually  sealed  need  not 
be  scaled  in  order  to  be  valid,  the  seal  may  be  disregarded  and 
a  parol  authority  will  be  sufficient.^  Third,  if  a  corporation 
executes  a  specialty  the  agent's  authority  to  execute  it  and 
affix  the  corporate  seal  need  not  itself  be  under  seal;  it  is 
enough  that  the  authority  has  been  conferred  by  a  vote  of  the 
directors.*  Fourth,  the  rule  has  also  been  greatly  relaxed  in 
the  case  of  partnerships,  and  many  jurisdictions  have  held  that 
one  partner  may  be  authorized  by  parol  to  execute  specialties 
in  the  partnership  name.^ 

(4)  If  a  deed  be  executed  by  the  grantor,  but  with  blanks 
left  in  it,  may  the  grantor  by  parol  authorize  an  agent  to  fill 
the  blanks  and  deliver  the  deed  ?  It  is  settled  that  a  parol 
authority  is  sufficient  for  the  delivery  of  a  deed.^  The  older 
authorities  denied,  however,  that  a  parol  authority  was  suffi- 
cient for  the  filling  of  blanks  in  a  deed."  The  modern 
authorities  in  the  United  States  are  strongly  in  favor  of  the 
view  that  where  the  agent  acting  under  parol  authority  fills 
the  blanks  before  or  at  the  time  of  delivery,  the  deed  is  effect- 
ive as  delivered.^  It  is  very  generally  held  that  this  is  so  in 
cases  where  the  grantee  is  ignorant  that  such  parol  authority 

1  Gardner  v.  Gardner,  5  Cush.  (Mass.)  483;  Eggleston  v.  Wagner,  46 
Mich.  610;  Jansen  v.  INIcCahill,  22  Cal.  563;  King  v.  Longnor,  4  Barn 
&  Adol.  647. 

2  Clou-h  V.  Clongh,  7-3  Me.  487. 

3  Worrall  v.  Munn,  .5  N.  Y.  229;  Alcorn's  Exec.  v.  Cook,  101  Pa.  St. 
209;  Wagoner  ^^  Watts,  44  N.J.  L.  126;  Thomas  r.  Joslin,  30  Minn. 
388.     Contra,  Wheeler  v.  Nevins,  34  Me.  54 ;  Pollard  c  Gibbs,  55  Ga.  45 

4  Bun-ill  V.  Nahant  Bank,  2  Met.  (Mass.)  163;  Howe  v.  Keeler,  27 
Conn.  538 ;  Fitch  v.  Lewiston  Steam  Mill  Co.,  80  Me.  34. 

6  Burdick  on  Partnership,  pp.  188-193;  Smith  v.  Kerr,  3  N.  Y.  144. 

•  Parker  i-.  Hill,  8  Met.  (Mass.)  447. 

'  Slieppard's  Touchstone,  54;  Ilibblewhite  v.  McMorine,  6  Mees.  &  W. 

200. 

8  Cribbeu  v.  Deal,  21  Ore.  211,  and  cases  there  cited. 


BY   AGREEMENT.  39 

has  been  conferred  and  exercised,  the  decision  in  such  cases 
being  put  upon  the  ground  of  estoppel.^  This  doctrine  is  not 
applicable  to  a  case  where  a  married  woman  who  can  not  ap- 
point an  agent  to  execute  the  deed,  but  must  execute  and 
acknowledge  it  in  person,  executes  and  acknowledges  a 
deed  with  blanks,  and  seeks  to  authorize  an  agent  to  fill  the 
blank  S.2 

(5)  In  England,  subject  to  various  exceptions,  it  seems  to 
be  the  rule  that  all  appointments  of  agents  by  corporations, 
other  than  trading  corporations,  must  be  under  the  corpo- 
rate seal.2  In  the  United  States  no  such  rule  seems  to  be 
recognized.* 

§  27.     Legality  of  object. 

A  contract  of  agency  must  not  contemplate  an  illegal 
object.  Accordingly  a  contract  of  agency  for  dealing  in 
futures  where  the  object  is  to  bet  on  the  rise  or  fall  of  prices,^ 
or  for  lobbying,*^  or  selling  smuggled  goods,"  or  for  procuring 
a  marriage  contract,^  or  for  improperly  influencing  the  action 
of  a  third  person,  as  by  assuming  to  advise  as  a  friend  when 
the  adviser  is  secretly  the  agent  of  one  who  is  to  profit  by  the 
advice,^  or  for  any  other  object  opposed  to  law,  or  public 
policy,  or  good  morals,  is  unenforceable.^^  The  whole  matter 
is  a  part  of  the  general  law  of  contract.^^ 

1  Phelps  ('.  Sullivan,  140  Mass.  36;  Campbell  v.  Smith,  71  N.  Y.  26. 
Contra:  Upton  v.  Archer,  41  Cal.  85. 

2  Drm-y  v.  Foster,  2  Wall.  (U.  S.)  24. 

8  Austin  V.  Guardians  of  Bethnal  Green,  L.  R.  9  C.  P.  91 ;  Arnold 
V.  Poole,  4  M.  &  G.  860 ;  Sutton  v.  Spectacle  Makers  Company,  10  L.  T. 
Rep.  411. 

4  1  IVIorawetz  on  Corp.  §  338;  Bank  v.  Patterson,  7  Cranch,  299. 

6  Irwin  r.  Williar,  llO  U.  S.  499. 

6  Trist  V.  Child,  21  Wall.  (U.  S.)  441  ;  IMills  v.  Mills,  40  N.  Y.  543. 

7  Armstrong  v.  Toler,  11  Wheat.  (U.  S.)  258. 

8  Duvall  ('.  Wellman,  124  N.  Y.  15G. 

9  Byrd  v.  Hughes,  84  Til.  174;  Bollman  v.  Loomis,  41  Conn.  581. 

w  Stout  V.  Ennis,  28  Kans.  706 ;  Nichols  v.  Mudgett,  32  Vt.  546 ;  Keat- 
ing V.  Hyde,  23  Mo.  App.  555 ;  White  v.  Equitable,  &c.  Union,  76  Ala.  251 ; 
Elkhart  County  Lodge  v.  Crary,  98  Ind.  238.     See  post,  §  83. 

^1  Huffcut's  Anson  on  Cout.  pp.  225-273. 


40  rORMATION    OF  AGENCY 

2.     Gratuitous  Agency. 
§  28.     Gratuitous  agency  as  between  principal  and  third  person. 

The  question  of  gratuitous  agency  resolves  itself  into  two 
parts  :  (1)  as  to  the  liability  of  a  principal  to  third  persons 
where  he  acts  through  a  gratuitous  agent;  (2)  as  to  the  lia- 
bility of  the  agent  to  the  principal  or  to  third  persons  where 
the  agent  serves  without  compensation. 

The  first  phase  of  the  question  affords  little  difliculty.  One 
who  acts  through  another  is  liable  to  third  persons  in  the 
same  way  as  if  he  had  acted  without  the  intervention  of  an 
agent,  and  so  far  as  the  tliird  person  is  concerned  it  is  wholly 
immaterial  whether  the  agent  acts  for  the  principal  for  com- 
pensation or  gratuitously.^  The  sole  inquiry  is,  had  the 
agent  authority  to  act  for  the  principal  ?  If  so,  the  princijjal 
is  bound  by  the  agent's  act  within  the  apparent  scope  of  the 
authority.  But  the  doctrines  as  to  the  competency  of  the 
principal  apply  to  a  gratuitous  agency  in  the  same  way  as  to 
an  agency  by  contract.'-^ 

§  29.     Gratuitous  agency  as  between  principal  and  agent. 

It  is  a  fundamental  dogma  of  the  English  law  that  a  con- 
sideration is  necessary  to  support  a  promise.  Accordingly  a 
gratuitous  promise  by  an  agent  to  perform  an  act  for  the  prin- 
cipal is  unenforceable.  If  the  agent  enters  upon  the  perform- 
ance of  the  act,  then  he  may  be  liable  for  the  negligent  manner 
in  which  he  performs  it,  either,  as  is  sometimes  said,  because 
the  consideration  then  arises  from  the  fact  that  the  principal 
suffers  a  detriment  in  parting  with  his  control  over  the  su])ject- 
matter  of  the  agency,  or,  as  is  more  accurately  said,  because 
one  who  voluntarily  meddles  with  the  property  rights  or  quasi 
pro])erty  rights  of  another  is  bound  to  act  as  an  ordinarily 
])rudcnt  man  would  act  under  like  circumstances.^ 

The  main  difference  therefore  between  an  agency  by  con- 

1  Haluptzok  r.  Great  Northern  Ry.,  55  Minn.  446. 

2  Ante,  §§  14-22. 

»  Thorne  v.  Deas,  4  Johns.  (X.  Y.)  84;  Wliitolioad  v.  Greetham,  2  Bing. 
i64;  rollock  on  Gout.  (Gth  ed.)  pp.  170-171 ;  2  Law  Q.  Rev.  33. 


BY   AGREEMENT.  41 

tract  and  a  gratuitous  agency  lies  in  the  fact  that  the  former 
may  be  enforced  while  it  remains  unacted  upon  by  either 
party,  while  the  latter  can  be  enforced  only  when  it  has  been 
acted  upon  by  the  agent,  and  he  has,  by  his  act,  involved  the 
interests  and  rights  of  the  principal.     But  of  this  hereafter.^ 

1  Post,  §§  97,  98. 


42  FOKMATION   OF  AGENCY 


CHAPTER  III. 

FORMATIOiN    OF   THE   RELATION    BY   RATIFICATION. 

§  30.     Meaning  of  the  term. 

(1)  Ratification  generally.  The  assent  of  the  principal  to 
the  act  of  the  agent  may  be  given  either  before  the  act  is  per- 
formed, or  after  it  is  performed.  When  given  before  it  is 
performed,  the  assent  is  in  the  nature  of  an  appointment  of  the 
agent  for  the  performance  of  the  act  as  explained  in  the  pre- 
ceding chapter.  When  given  after  the  act  is  performed,  it  is 
in  tlic  nature  of  a  ratification  of  the  act,  and  is  intended  to 
clothe  the  act  with  the  same  qualities  as  if  there  had  been  a 
prior  appointment.  Two  cases  of  ratification  are  clearly  dis- 
tinguishable :  first,  where  the  agent  had  no  prior  authority  for 
any  purpose  and  the  ratification  operates  as  an  appointment 
as  agent  and  as  authority  to  do  the  act  ratified  ;  second,  where 
the  agent  had  some  prior  authority,  but  exceeded  it  in  the  act 
in  question,  and  the  ratification  operates  as  an  extension  of 
the  authority  so  as  to  cover  the  act  ratified. 

(2)  Statement  of  doctrine.  Subject  to  the  exceptions  here- 
after mentioned,^  where  one  person,  whether  no  agent  for  any 
purpose  or  an  agent  exceeding  his.  authority,  does  an  act  as 
agent  in  the  name  of  or  on  behalf  of  another  in  excess  of  au- 
thority (if  any)  conferred  upon  him,  the  person  in  whose  name 
or  on  whose  behalf  the  act  was  done  may  ratify  the  act  and 
thereby  give  to  it  the  same  legal  effect  as  if  the  one  doing  it 
had  been  in  fact  an  agent,  or,  being  an  agent  for  some  pur- 
poses, had  been  in  fact  authorized  to  do  the  act  in  question.^ 

1  Post,  §§  42-44. 

2  Y.  B.  7  H.  IV.  Z\,pl.  1;  Wilson  v.  Tumman,  6  iM.  &  G.  230;  Phila- 
delphia, &c.  R.  V.  Cowell,  28  Pa.  St.  329 ;  McCracken  v.  San  Francisco, 
16  Cal.  501;  Grant  v.  Beard,  50  N.  H.  129;  Dempsey  v.  Chambers,  154 
Mass.  330,  where  the  history  of  ratification  is  given,  and  it  is  sliown  that 
the  doctrine  applies  to  master  and  servant  as  well  as  to  principal  and 
agent. 


BY   HATIFICATIOX.  43 

When  such  unauthorized  act  comes  to  the  knowledge  of  the 
one  in  whose  name  or  on  whose  behalf  it  was  assumed  to  be 
performed,  he  has  an  election  either  to  repudiate  the  act  or  to 
ratify  and  adopt  it.  If  he  elects  to  accept  it,  the  acceptance 
or  adoption  of  it  constitutes  a  ratification,  and  relates  back  to 
the  time  the  act  was  performed  in  such  manner  as  to  involve 
the  principal  and  third  person  on  the  one  hand,  and  the  prin- 
cipal and  agent  on  the  other,  in  the  same  legal  consequences 
as  would  have  ensued  had  the  act  been  authorized  in  advance. 
The  principal's  option  to  repudiate  or  ratify  secures  to  him  a 
certain  advantage  in  creating  a  contract  relation  which  is 
anomalous,  but  which  the  law  permits  him  to  enjoy .^  But  in 
order  that  he  shall  have  this  advantage,  it  is  necessary  that  a 
contract  shall  actually  have  been  consummated  prior  to  the 
attempted  ratification, ^ 

The  subject  of  ratification  falls  into  two  main  heads  :  (1) 
Elements,  or  conditions,  of  ratification ;  (2)  Legal  effects  of 
ratification. 

1.    Elements  of  Ratification. 

§  31.     Analysis  of  elements. 

The  essential  elements  or  conditions  of  ratification  are  as 
follows  :  (1)  An  act  performed  by  an  "  agent"  in  behalf  of  an 
existing  "  principal ;"  (2)  The  subsequent  real  assent  of  the 
principal  to  the  act  so  performed  in  his  behalf ;  (3)  The  com- 
petency of  the  principal  to  give  a  binding  assent ;  (4)  In  some 
cases  an  assent  expressed  in  a  particular  form;  (5)  The 
legality  of  the  act  ratified  ;  (6)  Exceptions  to  the  doctrine. 

§  32.     (I.)     Act  performed  in  behalf  of  existing  principal. 

Two  elements  must  concur  before  the  basis  for  ratification 
can  be  said  to  be  laid :  (1)  The  principal  must  be  an  existing 
person  capable  of  being  ascertained,  and  (2)  The  contract 
must  have  been  made  in  the  name  of  and  in  behalf  of  such 
existing  and  ascertainable  person. 

1  Hagedorn  v.  Oliverson,  2  M.  &  S.  485;  Williams  v.  North  China 
Insurance  Co.,  L.  R.  1  C.  P.  D.  757. 

2  Whitiug  V.  Mass.  &c.  Ins.  Co.,  129  Mass.  240. 


44  FORMATION   OF   AGENCY 

(1)  The  principal  must  be  an  existing  person.  If  an  agent 
professes  to  make  a  contract  in  behalf  of  a  corporation  to  be 
formed,  but  not  yet  in  existence,  the  contract  is  incapable  of 
ratification  after  the  corporation  has  a  legal  existence.^  The 
corporation  may  make  a  new  contract  upon  the  same  terms 
as  the  original  one,  but  this  is  a  dififerent  matter  from  ratifica- 
tion. It  is  one  thing  to  intend  to  ratify  and  to  proceed  upon 
the  assumption  that  there  is  a  ratification,  and  another  thing 
to  intend  to  make  a  contract  and  to  proceed  upon  that  assump- 
tion,2  But  if  after  the  incorporation  the  company  is  found  in 
possession  of  property  or  benefits  accepted  under  the  terms  of 
the  contract,  this  may  be  equivalent  to  proof  of  a  new  contract 
on  the  terms  of  the  original  one  or  of  a  novation.^  This  comes 
very  near  the  line  of  ratification,  but  is  distinguishable  from 
it  in  theory.^  Some  courts  treat  the  case  as  one  of  ratifica- 
tion,^ but  tills  is  not  justified  under  the  general  doctrine,  un- 
less, indeed,  it  be  upon  the  theory  that  the  court  looks  beyond 
the  corporate  entity  and  fixes  upon  the  stockholders  as  the 
real  principals.^ 

(2)  The  contract  must  be  professedly  made  in  behalf  of  such 
existing  principal.  It  seems  to  be  the  prevailing  American  rule 
that  in  order  that  a  person  may  ratify  an  act  of  another,  the  act 
must  have  been  done  professedly  in  the  name  of,  and  on  behalf 
of,  the  one  so  ratifying, —  in  other  words,  that  where  the  act  is 
done  in  the  name  of  the  actor,  without  naming  or  disclosing 
any  other  person,  there  can  be  no  ratification,  even  though  the 
actor  was  in  fact  acting  in  behalf  of  an  undisclosed  principal.^ 

1  Kelner  v.  Baxter,  L.  R.  2  C.  P.  17i;  Abbott  i-.  Hapgood,  150  Mass. 
248. 

2  In  re  Northumberland  Avenue  Hotel  Co.,  L.  R.  33  Ch.  D.  IG; 
Stainsby  v.  Frazer's  Co.,  3  Daly  (N.  Y.  C.  P.),  98. 

8  McArthur  v.  Tinaes  Printing  Co.,  48  Minn.  319. 

4  Howard  v.  Patent  Ivory  Co.,  L.  R.  38  Ch.  D.  156  ;  Paxton  Cattle 
Co.  V.  First  National  Bank,  21  Neb.  (521 ;  Bell's  Gap  R.  R.  v.  Christy,  79 
Pa.  St.  54 ;  Rockford,  &c.  R.  r.  Sage,  65  III.  328. 

6  Whitney  v.  Wyman,  101  U.  S.  392  ;  Oakes  v.  Cattaraugus  Water  Co., 
143  N.  Y.  430. 

*  See  Morawetz  on  Corp  §§  547-549. 

">  Hamlin  v.  Sears,  82  N.  Y.  327;  Grund  v.  Van  Vleck,  69  111.  478; 


BY   RATIFICATION.  45 

This  is  now  unquestionably  tlie  English  rule.  Where  an 
ao'cnt  made  a  contract  in  his  own  name  for  the  benefit  of  an 
undisclosed  principal,  but  without  authority  from  that  prin- 
cipal, it  was  held  by  the  House  of  Lords  in  the  recent  case  of 
KeigUe'y  v.  Burant^  that  there  could  be  no  ratification.  This 
had  previously  been  assumed  to  be  the  English  law.^  But  the 
majority  of  the  Court  of  Appeal  held  that  the  undisclosed 
principal  might  ratify .^  The  House  of  Lords  unanimously 
reversed  this  holding,  and  laid  down  the  doctrine  that  if  one 
makes  a  contract  in  his  own  name,  not  purporting  to  act  on 
behalf  of  a  priuci})al,  but  having  a  secret  intention  to  act, 
though  without  authority,  for  a  principal,  the  contract  so 
made  cannot  be  ratified  by  the  undisclosed  principal  so  as  to 
enable  him  to  sue  or  render  him  liable  to  be  sued  upon  it. 
"The  whole  hypothesis  of  ratification  is,  that  the  ultimate 
ratifier  is  already  in  appearance  the  contractor,  and  that  by 
ratifying  he  holds  as  done  for  him  what  already  bore,  pur- 
ported or  professed  to  be  done  for  him.  There  is  no  room 
for  ratification  (unless  all  the  world  may  ratify)  until  the 
credit  of  another  than  the  agent  has  been  pledged  to  the 
third  party."* 

If  A.  makes  a  contract  in  the  name  and  on  1)ehalf  of  B.,  C. 
cannot,  by  an  attempted  ratification,  take  advantage  of  it,  nor 
can  C.  ratify  it  so  as  to  become  liable  upon  it.^  If  A.  makes 
the  contract  in  his  own  name,  and  really  on  his  own  behalf, 
B.  cannot  in  any  way  become  a  party  to  it.''     If  A  makes  the 

Herd  v.  Bank  of  Buffalo,  66  Mo.  App.  643;  Pittsburg,  &c.  R.  v.  Gazzara, 
32  Pa.  St.  340;  Western  Pub.  House  v.  Dist.  Tp.  of  Rock,  84  Io^va,  101. 

1  1901,  A.  C.  240. 

2  ]\Iatheson  v.  Kilburn,  1  Sm.  L.  C.  (10th  ed.)  p.  349;  Saunderson  v. 
Griffith,  5  B.  &  C.  909 ;  Wilson  v.  Tumman,  6  M.  &  G.  236 ;  Watson  v. 
Swan,  11  C.  B.  n.  s.  756 ;  dissenting  opinion  of  A.  L.  Smith,  L.  J.,  in 
Durant  v.  Roberts,  1900,  1  Q.  B.  629,  633. 

3  Durant  v.  Roberts,  1900,  1  Q.  B.  629. 

4  Lord  Robertson  in  Keighley  v.  Durant,  1901,  A.  C.  240,  259. 

^  Saunderson  v.  Griffith,  5  B.  &  C.  909 ;  Jones  v.  Hope,  3  Times  L. 
Rep.  247 ;  Hawke  v.  Cole,  62  Law  Times,  658. 

8  Boulton  V.  Jones,  2  H.  &  N.  564;  Boston  Ice  Co.  v.  Potter,  123 
Mass.  28. 


46  FORMATION   OF   AGENCY 

contract  in  his  own  name  as  principal,  but  really  on  behalf 
of  an  undisclosed  principal,  the  latter  cannot  ratify  it.^ 

Under  the  rule  that  the  principal  must  be  disclosed  as  a  con- 
dition precedent  to  ratification,  it  has  been  held  that  it  is  enough 
that  some  person  who  may  be  ascertained  and  identified  is  re- 
ferred to.  Thus  insurance  may  be  effected  in  behalf  of  all 
persons,  generally,  who  may  be  shown  to  be  interested,  and 
any  person  actually  interested  may  ratify.^  So  also  one  may 
act  in  behalf  of  an  heir  or  administrator  or  owner,  though  not 
specifically  identified,  and  if  such  person  is  capable  of  being 
ascertained,  he  may  ratify.^ 

Whether  a  sheriff,  in  making  a  levy  without  special  instruc- 
tions, acts  on  behalf  of  an  attaching  creditor  or  as  an  oflicer 
of  the  court  serving  in  a  public  capacity,  lies  at  the  root  of  a 
difference  of  judicial  opinion  as  to  whether  an  unauthorized 
and  wrongful  levy  may  be  ratified.  The  leading  English  case 
holds  there  can  be  no  ratification,*  but  some  American  cases 
hold  that  there  may  be  a  ratification,^ 

§  33.  (II.)    Assent  of  the  principal. 

Ratification,  like  prior  authority  by  agreement,  rests  on 
assent.  The  assent  of  the  agent  is  already  given  by  his 
assuming  to  act.  The  assent  of  the  third  party  is  already 
given  by  his  entering  into  the  contract.^  The  assent  of  the 
principal  is  therefore  all  that  is  required  to  make  the  contract 
binding  on  him  and  on  the  third  person.  Much  the  same 
considerations  govern  the  doctrine  of  assent  in  ratification  as 
govern  the  assent  in  the  acceptance  of  an  offer.^     These  may 

^  Keighley  v.  Durant,  supra. 

2  Hagedorn  r.  Oliverson,  2  M.  &  S.  485. 

8  Foster  v.  Bates,  12  U.  &  W.  226 ;  Lyell  v.  Kennedy,  14  App.  Cas. 
437. 

*  Wilson  V.  Tumman,  6  M.  &  G.  236. 

6  Brainerd  v.  Dunning,  30  N.  Y.  211. 

«  As  to  whether  he  can  withdraw  his  assent  before  ratification,  see 
post,  §  38. 

">  Yet  it  must  not  be  supposed  that  ratification  is  a  contract.  It  is  an 
election  to  regard  a  prior  acceptance  by  an  unauthorized  agent  as  the 
assent  of  the  principal.     Metcalf  v.  Williams,  144  Mass.  452. 


BY   RATIFICATION.  47 

be  summarized  as  follows  :  (1)  The  assent  may  be  express  or 
implied.  (2)  Silence  is  not  (ordinarily)  assent.  (3)  Assent 
must  be  in  toto  and  unconditional.  (4)  Assent  must  be  free 
from  mistake  or  ignorance  as  to  facts,  and  from  fraud.  A 
further  consideration  involves  the  question  :  (5)  Has  the  third 
party  a  right  to  recede  before  ratification  by  the  principal  ? 

§  34.  —  (1.)     Assent  may  be  express  or  implied. 

Except  in  cases  where  a  particular  form  is  necessary,  the 
ratification  may  be  either  by  express  words  or  by  conduct. 
All  that  the  law  requires  is  such  a  manifestation  of  the  intent 
of  the  principal  to  adopt  the  act  of  the  agent  as  would  lead 
the  ordinarily  prudent  man  to  conclude  that  the  principal  has 
assented.  The  main  difference  between  the  two  methods  is  in 
the  nature  of  the  proof  offered  to  establish  the  ratification. 
One  other  difference  has  to  do  with  the  question  whether  the 
principal  knew  all  the  material  facts  when  he  manifested  his 
assent.  If  he  has  expressly  adopted  the  act  there  may  be  a 
presumption  that  he  has  either  learned  all  the  material  facts 
or  has  learned  all  he  cares  to  know  of  them,  and  has  deliber- 
ately assumed  the  risk  as  to  the  others ;  ^  while  if  he  has 
impliedly  adopted  the  act,  the  conduct  relied  on  to  establish 
the  assent  must  have  a  greater  or  less  probative  force  accord- 
ing as  the  principal  knows  or  does  not  know  the  facts  to 
which  his  conduct  is  sought  to  be  related.^  While,  therefore, 
the  knowledge  of  the  principal  of  the  material  facts  connected 
with  the  transaction  is  a  material  element  in  ratification,^  the 
difficulties  of  establishing  such  actual  knowledge  increase  or 
diminish  according  as  the  ratification  is  by  conduct  or  by 
words.* 

(1)  Express  Ratification.  Express  ratification,  like  express 
authority,  may  ordinarily  be  in  any  form,  parol  or  written,  and 
if  written,  sealed  or   unsealed.^      Where,  however,  a  prior 

^  Kelley  v.  Newburyport  Horse  R.,  141  Mass.  496. 

2  Combs  ('.  Scott,  1-2  Allen  (Mass.),  493. 

8  Post,  §  37. 

♦  Hyatt  V.  Clark,  118  N.  Y.  563. 

6  Ante,  §  2G. 


48  FORMATION   OF   AGENCY 

authority  would  require  to  be  in  any  particular  form,  a  subse- 
quent ratification  must  be  in  like  form.  This  general  rule  is 
subject  to  some  qualifications  to  be  considered  hereafter.^  It 
seems  that  an  express  ratification  must  be  addressed  to  the 
other  contracting  party,  or  intended  to  be  communicated  to 
him  ;  a  mere  declaration  to  a  stranger  is  not  sufficient.^ 

(2)  Ratification  hi/  Conduct.  Any  conduct  by  the  principal 
which  would  lead  a  reasonable  man  to  conclude  that  the  prin- 
cipal is  manifesting  an  intent  to  be  bound  by  the  agent's 
contract  will  be  deemed  a  ratification.  This  conduct  may 
assume  an  endless  variety  of  forms.  Only  a  few  of  these 
can  bo  here  mentioned  by  way  of  illustration.  By  accei)ting 
benefits  under  the  contract,  a  principal  will  be  held  to  have 
ratified  it.  "No  rule  of  law  is  more  firmly  established  than 
the  rule  that  if  one,  with  full  knowledge  of  the  facts,  accepts 
the  avails  of  an  unauthorized  treaty  made  in  his  behalf  by 
another,  he  thereby  ratifies  such  treaty,  and  is  bound  by  its 
terms  and  stipulations  as  fully  as  he  would  be  had  he 
negotiated  it  himself."  ^  By  bringing  an  action  on  the  con- 
tract, a  principal  will  be  held  to  have  ratified  it,  whether  the 
action  be  against  the  third  person  or  against  the  agent  for 
the  proceeds  of  the  contract.*  Ratification  may  be  after 
action  is  brought  by  another  in  the  name  of  the  one  ratify- 
ing.^ Where  A  has  received  the  rents  of  property  for  years 
without  authority,  an  action  by  the  owner  for  an  accounting 
is  a  suflicient  ratification  to  render  A  an  agent  as  from  the 
beginning.^     By  promising  to  pay  the  agent's  commissions 

1  Post,  §  40. 

2  Rutland,  &c.  R.  v.  Lincoln,  29  Vt.  206. 

8  Strasser  v.  Conklin,  54  Wis.  102;  Hyatt  v.  Clark,  118  N.  Y.  563; 
Pike  V.  Douglass,  28  Ark.  59;  Thomas  v.  City  N.  B.,  40  Neb.  501; 
Wheeler,  &c.  Co.  v.  Aughey,  144  Pa.  St.  308. 

*  Bank  of  Beloit  v.  Beale,  34  N.  Y.  473 ;  Partridge  v.  White,  59  ^le. 
564;  Frank  v.  Jenkins,  22  Oh.  St.  597;  Merrill  v.  Wilson,  66  Mich. 
232;  Benson  v.  Liggett,  78  Ind.  452;  Ferguson  v.  Carrington,  9  B.  & 
C.  59. 

6  Ancona  v.  Marks,  7  IL  &  N.  686.  Contra,  Witteubrock  v.  Bellmer, 
57  Cal.  12. 

«  Lyell  V.  Kennedy,  14  App.  Cas.  437. 


BY  RATIFICATION.  49 

after  full  knowledge  of  the  unauthorized  contract,  the  princi- 
pal ratifies  the  act.^  Even  an  express  declaration  of  repudia- 
tion of  the  contract  may  be  overcome  by  subsequent  conduct, 
but  the  proof  should  be  clear  and  decisive.^ 

§  35.  —  (2)  Ratification  by  silence. 

It  is  a  general  rule  in  the  law  that  silence  does  not  give 
consent,^  and  this  is  modified  only  by  the  consideration  that 
in  some  special  circumstances  good  faith  may  require  a  man 
to  speak  or  be  thereafter  estopped  by  his  silence.  In  the 
application  of  these  principles  to  the  doctrine  of  ratification  it 
is  necessary  to  distinguish  at  the  outset  between  an  unauthor- 
ized act  by  one  who  has  no  authority  to  act  at  all,  and  a  like 
act  by  one  who  has  some  authority  to  act  but  who  has 
exceeded  his  authority. 

(1)  Unauthorized  Act  hy  Stranger.  Mere  silence  by  one 
in  whose  behalf  a  stranger  has  assumed  to  act  would  not 
probably  be  sufficient  evidence  of  ratification,  although,  in 
connection  with  other  circumstances,  it  might  be  some  evi- 
dence.* Circumstances  may  also  be  present,  which,  coupled 
with  the  silence  of  the  supposed  principal,  would  lead  a 
reasonable  man  to  believe  that  an  agency  did  in  fact  exist. 
In  such  a  case  a  duty  seems  to  be  laid  upon  the  supposed 
principal  to  speak  in  order  not  to  mislead  the  third  party  to 
his  injury.^  The  question  is  after  all  one  as  to  the  sufficiency 
and  not  the  kind  of  evidence,  and  it  is  clear  that  silence  in 
one  set  of  circumstances  would  not  have  the  same  evidential 
force  as  in  another  set  of  circumstances.  "  It  is  one  thing  to 
say  that  the  law  will  not  imply  a  ratification  from  silence,  and 
a  very  different  thing  to  say  that  silence  is  a  circumstance 
from  which,  with  others,  a  jury  may  imply  it."*^ 

1  Gillett  V.  Whiting,  141  N.  Y.  71. 

2  Coriiwal  V.  AVilson,  1  Ves.,  Sr.,  509;  City  of  Findlay  v.  Pertz,  66 
Fed.  Rep.  427. 

3  Royal  Ins.  Co.  v.  Beatty,  119  Pa.  St.  6. 

*  Ward  V.  Williams,  26  III.  447 ;  Philadelphia,  &c.  R.  v.  Cowell,  28  Pa. 
St.  329. 

5  Heyn  v.  O'llagen,  60  Mich.  150;  Saveland  i;.  Green,  40  Wis.  431. 

*  Phil.  &c.  R.  V.  Cowell,  supra. 

4 


60  FOUMATION    OF    AGENCY 

(2)  Unauthorized  Act  hy  Agent.  Where  an  agent  exceeds 
his  authority,  and  the  principal,  after  knowledge  of  the  trans- 
action, remains  silent,  such  silence  may  in  itself  be  sufficient 
evidence  of  ratilicalion.^  In  some  eases  it  may  amount  to 
conclusive  evidence  of  ratification.^  The  evidential  force  of 
the  silence  is  much  greater  and  more  cogent  where  an  agency 
actually  exists  than  where  the  act  is  that  of  a  stranger, 
because  the  circumstances  of  the  case  demand  more  impera- 
tively that  the  principal  should  speak.  The  time  wiihin 
\vhich  he  nuist  speak  is  to  be  determined  by  the  facts  of  the 
case.  It  must  be  a  reasonable  time  after  he  learns  of  the 
miauthorized  act.'^ 

§  36.    -  (3)  Assent  must  be  in  toto  and  unconditional. 

The  principal  must  ratify  the  whole  act  or  disaffirm  the 
whole.  He  cannot  ratify  as  to  a  part  and  disaffirm  as  to  the 
rest.*  A  mail  cannot  take  the  benefits  of  a  contract  without 
bearing  its  burdens.^  The  principle  is  fundamental  and  axio- 
matic. Accordingly  the  ratification  of  ])art  of  a  transaction 
operates  as  a  ratification  of  the  whole.*^  So  also  ratifying  an 
unauthorized  act  or  transaction  is  a  ratification  of  torts  that 
may  have  been  committed  in  the  doing  of  it.'' 

§  37.  —  (4)  Assent  must  be  free  from  mistake  or  fraud. 

In  order  that  the  ratification  may  be  binding  it  is  necessary 
that  it  should  be  genuine,  that  is,  it  must  be  the  free  and 
intelligent  act  of  the  principal.     Several  circumstances  may 

1  Fothergill  v.  Pliillips,  L.  R.  G  Ch.  App.  770;  Kent  r.  Quicksilver 
Mining  Co.,  78  N.  Y.  159;  Mobile,  &c.  Ry.  r.  Jay,  G.'j  Ala.  113. 

2  Lee  V.  Fontaine,  10  Ala.  755;  Jones  v.  Atkinson,  G8  Ala.  167;  Alex- 
ander V.  Jones,  64  Iowa,  207. 

8  Mobile,  &c.  Ry.  v.  Jay,  sitpra. 

*  Smith  V.  Iloilson,  4  T.  R.  211 ;  Brigham  r.  Palmer,  '\  Allen  (Mass.), 
450;  Eberts  c.  Selover,  44  Midi.  519;  Mundorff  v.  Wickersham,  G:]  Pa. 
St.  87;  Billings  v.  IMason,  80  Me.  49G. 

6  Bri.stow  V.  Whitmore,  9  H.  L.  Cas.  391,  404;  Rudasill  v.  Falls,  92 
N.  C.  222. 

"  Wilson  c.  Poulter,  2  Str.  859 ;  Bristow  v.  Whitmore,  9  II.  L.  Cas. 
391. 

^  Dempsey  c.  Chambers,  154  Mass.  330. 


BY    RATIFICATION.  51 

intervene  to  prevent  the  reality  of  the  assent,  the  chief  among 
these  being  mistake  and  fraud. 

(1)  Mistake.  The  most  obvious  ground  of  mistake  is  that 
the  principal  ratified  the  act  believing  certain  facts  to  exist 
when  in  reality  the  facts  were  otherwise.  "  The  general  rule 
is  perfectly  well  settled,  that  a  ratification  of  the  unauthorized 
act  of  an  agent,  in  order  to  be  effectual  and  binding  on  the 
principal,  must  have  been  made  with  a  full  knowledge  of  all 
material  facts,  and  that  ignorance,  mistake,  or  misapprehen- 
sion of  any  of  the  essential  circumstances  relating  to  the 
particular  transaction  alleged  to  have  been  ratified  will  absolve 
the  principal  from  all  liability  by  reason  of  any  supposed 
adoption  or  assent  to  the  previously  unauthorized  act  of  an 
agent."  ^  While  the  rule  is  clear  that  the  principal  must 
know  all  the  material  facts  before  the  ratification  will  become 
binding,  or,  rather,  that  upon  discovery  of  his  mistake  he 
may  avoid  the  ratification,  the  application  of  the  rule  calls 
for  some  additional  consideration.  The  first  is  that  the 
principal  may  choose  to  ratify  knowing  that  he  is  ignorant 
of  all  the  circumstances.  In  such  a  case  he  assumes  the 
risk  with  knowledge  of  his  ignorance,  and  is  not  misled  or 
deceived.2  The  second  consideration  is  that,  where  the  agent 
was  authorized  to  act,  but  departed  from  his  instructions, 
there  is  a  presumption  that  the  principal  knows  all  the  facts. 
This  presumption  grows  out  of  the  doctrine  of  agency,  — 
that  the  knowledge  of  the  agent  is  the  knowledge  of  the 
principal,  since  it  is  the  duty  of  the  agent  to  disclose  to  his 
principal  all  the  facts  connected  with  the  agency. ^  This  con- 
sideration would  not  prevail  where  the  act  was  that  of  a 
stranger,  nor  is  it  admitted  as  correct  in  all  cases  of  un- 
authorized acts  by  agents.*  The  third  consideration  is  that 
it  is  not  necessary  that  the  principal  should  have  knowledge 

1  Combs  V.  Scott,  12  Allen  (Mass.),  493;  Lewis  v.  Read,  13  M.  &  W. 
834;  Freeman  v.  Rosher,  13  Q.  B.  780. 

2  Kelley  v.  Newburyport  Horse  R.,  141  Mass.  496;  Lewis  i-.  Read, 
supra ;  Fitzmaurice  v.  Bayley,  6  El.  &  B.  868. 

«  Meehaii  v.  Forrester,  52  N.  Y.  277;  Hyatt  v.  Clark,  118  N.  Y.  563. 
Post,  §  141. 

*  Combs  V.  Scott,  12  Allen  (Mass.),  493. 


52  FORMATION    OF   AGENCY 

of  all  collateral  circumstances  so  long  as  lie  has  knowledge 
of  the  main  transaction.^ 

(2)  Fraud.  If  the  principal  is  induced  to  ratify  the  con- 
tract by  the  fraud  of  the  third  party  he  can,  of  course,  avoid 
the  ratification.^ 

^  38.  —  (5)  Has  the  third  party  a  right  to  recede  before  ratification? 

It  is  a  disputed  question  whether  the  third  party  who 
has  entered  into  a  contract  with  an  unauthorized  agent 
has  a  right  to  recede  from  the  contract  at  any  time  before 
ratification. 

In  England  it  is  held  that  he  has  not  a  right  to  recede  on  the 
ground  that  the  contract  with  the  agent  binds  the  third  party, 
though  it  does  not  bind  the  principal,  and  that  a  subsequent 
ratification  by  the  principal  relates  back  to  the  time  when  the 
contract  was  formed,  and  places  the  parties  in  tlie  same  posi- 
tion as  if  the  agent  had  had  prior  authority.^  "  It  comes  to 
this,  that  if  an  offer  to  purchase  is  made  to  a  person  who 
professes  to  be  the  agent  for  a  principal,  but  who  has  no 
authority  to  accept  it,  the  person  making  the  offer  will  be  in 
a  worse  position  as  regards  withdrawing  it  than  if  it  had  been 
made  to  the  principal ;  and  the  acceptance  of  the  unauthor- 
ized agent  in  the  mean  time  will  bind  the  purchaser  to  his 
principal,  but  will  not  in  any  way  bind  the  principal  to  the 
purchaser."  *  This  view  is  further  supported  by  some  text- 
writers,  and  in  occasional  dicta  of  American  judges.^  While 
this  is  the  holding  of  the  English  courts  on  tliis  point,  they 
hold  that  the  third  person  and  the  unauthorized  agent  may 
by  mutual  assent  release  the  third  person  from  any  obligations 
under  the  contract  at  any  time  before  ratification.^ 

1  Ililbery  v.  Ilatton,  2  II.  &  C.  822;  Denipsey  y.  Chambers,  154  Mass. 
330. 

2  Owings  V.  Hull,  9  Pet.  (U.  S.)  007. 

»  Bolton  Partners  v.  Lambert,  L.  R.  41  Ch.  D.  205. 

<  North,  J.,  in  In  re  Portuguese,  &c.  Mines,  L.  R.  45  Ch.  D.  16,  21. 

'  Wharton  on  Agency,  §§  870-877;  Story  on  Agency,  §§  245-248; 
Andrews  v.  yEtna  Life  Ins.  Co.,  92  N.  Y.  596,  604. 

8  Walter  v.  James,  L.  R.  6  Ex.  124;  Stillwell  i-.  Staples,  19  N.  Y. 
401. 


BY   KATIFICATION.  53 

In  the  United  States  the  doctrine  generally  prevails  that  the 
third  person  may  recede  from  the  contract  at  any  time  before 
ratification,  on  the  ground  that  prior  to  ratification  there  is  no 
mutuality,  and  that  if  one  party  is  free  to  be  bound  or  not 
bound,  the  other  must  also  be  frec.^  The  decisions  in  Dodge 
V.Hopkins  and  Clews  y.  Jamieson^  actually  go  beyond  this 
point,  and  hold  the  unauthorized  contract  a  nullity,  and  a 
subsequent  ratification  also  a  nullity  unless  assented  to  by 
the  third  party.  But  this  is  obviously  too  refined  for 
the  necessities  of  business.  It  is  better  to  treat  the  con- 
tract between  the  third  person  and  the  agent  as  in  the  nature 
of  an  offer  to  the  principal,  which  the  latter  may  accept  or  re- 
ject by  an  election  operating  upon  the  previous  unauthorized 
acceptance  by  the  agent.  It  dili'ers  from  an  ordinary  offer  in 
"contract  mainly  in  this,  that  it  remains  open  until  actually 
withdrawn  by  notice  to  the  principal  or  the  agent,  whereas  an 
ordinary  offer  lapses  by  the  expiration  of  time.  This  avoids  the 
extremes  of  the  English  doctrine  on  the  one  hand,  which  treats 
the  unauthorized  contract  as  in  effect  an  irrevocable  offer,  and 
of  the  doctrine  of  Dodje  v.  Hopkins  on  the  other  hand,  which 
treats  it  as  in  effect  no  offer  at  all.  The  case  is  an  anomalous 
one  at  best  and  requires  anomalous  treatment.^ 

§  39.    (III.)    Principal  must  be  competent. 

The  competency  of  the  principal  has  already  been  discussed.* 
The  same  considerations  prevail  in  respect  of  the  competency 
of  the  principal  to  ratify  an  act  as  to  authorize  it.  An  infant 
may  ratify,  if  he  could,  by  appointing  an  agent,  authorize;^ 
but  his  ratification  is  not  conclusive.^     If  his   appointment  of 

1  Dodge  I'.  Hopkins,  14  Wis.  630;  Atlee  v.  Bartholomew,  69  Wis.  43; 
Townsend  v.  Corning,  23  Wend.  (N.  Y.)  43.5;  Clews  v.  Jarnieson,  89  Fed. 
Rep.  63.  See  also  Wilkinson  v.  Heavenrich,  58  Mich.  574  ;  ]McClintock 
V.  South  Penn.  Oil  Co.,  146  Pa.  St.  144,  161-162. 

2  This,  however,  was  the  case  of  an  undisclosed  principal,  and  must  be 
considered  in  connection  with  the  doctrines  of  §  32,  a7i(e. 

8  See  9  Harv.  Law  Rev.  60 ;  5  Am.  St.  Rep.  109. 
*  Anie,  §§  15-22. 

^  Patterson  v.  Lippincott,  47  N.  J.  L.  457. 

«  McCiacken  v.  San  Francisco,  16  Cal.  591,  623-624;  Armitage  v. 
Widoe,  36  Mich.  124. 


54  FORMATION   OF   AGENCY 

an  agent  would  be  voiil,  then  he  cannot  ratify  even  after  coming 
of  agc.^  If  a  married  woman  can  appoint  an  agent,  she  may- 
ratify  the  act  of  one  who  has  represented  her  without  au- 
thority .^  Corporations  may  ratify  cither  by  vote  of  the  direc- 
tors where  they  would  have  power  to  authorize,^  or  by  vote  of 
stockholders  where  the  act  could  be  authorized  only  by  them.* 
Acquiescence  of  stockholders  may  amount  to  ratification.^  One 
partner  may  ratify  for  the  firm.*'  Voters  may  ratify  or  dis- 
affirm tlie  unauthorized  act  of  the  agents  of  a  municipal  or 
quasi-public  corporation."  A  state,  througli  the  legislature, 
may  ratify  the  unauthorized  acts  of  agents.^  Where  an  agent 
has  authority  to  do  an  act  he  may,  in  behalf  of  his  princij)al, 
ratify  the  like  unauthorized  act  of  another  agent,  but  not,  it 
seems,  of  one  who  is  not  an  agent  for  any  purpose.^ 

The  matter  presents  itself  in  several  aspects  :  (1)  The  prin- 
cipal may  have  been  competent  when  the  act  was  done  and 
competent  when  it  was  ratified ;  (2)  he  may  have  been  incom- 
petent when  it  was  done  and  incompetent  when  it  was  ratified  ; 
(3)  he  may  have  been  competent  when  it  was  done  and  incom- 
petent when  it  was  ratified  ;  (4)  he  may  have  been  incompetent 
when  it  was  done  and  competent  when  it  was  ratified.  The 
first  three  cases  call  for  no  special  comment.  In  the  first,  the 
ratification  is  clearly  binding.  In  the  second  and  third,  it  is  as 
clearly  not  conclusively  binding. 

The  fourth  case  presents  a  difTiculty.  If  the  incompetent 
could  have  appointed  an  agent,  subject  only  to  his  right  to  dis- 
affirm the  contract  of  agency,  then  clearly  he  could,  on  arriv- 
ing at  competency,  aflUrm  the  agency  and  thereby  ratify  the 

1  Trueblood  i'.  Trueblood,  8  Ind.  195. 

2  McLaren  v.  Hall,  2G  Iowa,  297. 

«  Wilson  V.  West  Hartlepool,  &c.  Ry.,  2  De  G.,  J.  &  S.  475. 

*  Spackman  v.  Evans,  L.  K.  3  II.  L.  171 ;  Grant  v.  Rv.,  40  Ch.  Div. 
135. 

6  London,  &c.  Ass'n  v.  Kelk,  20  Ch.  Div.  107;  Evans  v.  Sniallcombe, 
L.  R.  3  H.  L.  249. 

«  Forbes  i'.  Ilagnian,  75  Va.  168. 

'  School  District  v.  iEtna  Ins.  Co.,  62  Me.  330. 

*  Wisconsin  i'.  Torinus,  26  ^Minn.  1 ;  People  v.  Denison,  SO  N.  Y.  656. 

*  Ironwood  Stove  Co.  r.  Harrison,  75  Mich.  197. 


BY    RATIFICATION.  55 

acts  of  the  af^cnt.'  So,  it  would  seem,  lie  could  ratify  unau- 
thorized acts  of  that  agent  as  well  as  authorized  acts.  So,  too, 
he  could  ratify  the  acts  of  one  who  assumed  to  represent  him 
without  any  authority.  But  if  the  appointment  of  an  agent  by 
the  incompetent  would  be  void  (as  in  some  States  in  case  of 
infancy),  then  clearly  the  act  could  not  have  been  authorized 
when  it  was  performed.  How  then  could  it  be  ratified  after  it 
was  performed  ?  The  conclusion  is  that  the  act  so  done  by  an 
agent  cannot  be  ratified.^  But  this  is  dependent  upon  the 
answer  to  the  question  whether  the  infant  could  have  appointed 
the  agent.3 

§  40.    (IV.)    Form  of  ratification. 

It  has  already  been  seen  that,  with  the  exception  of  a  few 
cases,  the  authority  of  an  agent  may  be  conferred  without  any 
formality  whatever.  The  same  general  rule  applies  to  ratifica- 
tion. Unless  the  case  is  one  in  which  the  authority,  if  con- 
ferred in  the  first  instance,  must  have  been  under  seal  or  in 
writing,  the  ratification  may  be  by  parol.^ 

(1)  Ratification  of  agenfs  contract  under  seal.  Authority 
to  execute  a  contract  which  is  required  to  be  under  seal,  must 
be  conferred  by  an  instrument  under  seal,  and  consequently 
the  unauthorized  execution  of  such  a  contract  can  be  rati- 
fied only  by  an  instrument  of  equal  formality.^  But  the  con- 
stantly growing  tendency  to  do  away  with  the  formality  of  a 
seal  has  led  to  an  exception  to  the  above  rule,  and  it  seems 
now  to  be  generally  recognized  that  the  execution  of  a  sealed 
instrument  by  a  partner  in  the  firm  name  may  be  ratified  by 
the  other  partner  by  parol.^     The  Massachusetts  court  goes 

^  Conrsolle  r.  Weyerhauser,  G9  Minn.  328. 

2  Trueblood  v.  Trueblood,  8  Ind.  19.5;  Armitage  v.  Widoe,  36  Mich. 
124. 

8  See  ante,  §  15. 

*  Goss  V.  Stevens,  32  j\Iinn.  472  ;  Taylor  v.  Conner,  41  Miss.  722. 

6  Hanford  v.  INIcXair,  9  Wend.  (N.  Y.)  54 ;  Heath  v.  Nutter,  50  Me. 
378;  Spofford  r.  Hobbs,  29  :Me.  148;  Despatch  Line  v.  Bellamy  ]\Ifg.  Co., 
12  X.  H.  205;  Pollard  v.  Gibbs,  55  Ga.  45;  Oxford  v.  Crow,  1893,  3  Ch. 
535. 

*  Peine  v.  Weber,  47  111.  41 ;  Holbrook  v.  Chamberlin,  116  ]\Iass.  155. 


56  FORMATION    OF   AGENCY 

still  further  and  liolds  that  a  parol  ratification  is  sufficient, 
even  in  cases  where  the  unautliurized  execution  of  the  sealed 
instrument  is  in  the  name  of  an  individual.^  Of  course,  if  the 
scaled  instrument  is  one  ui)on  which  no  seal  is  necessary,  the 
seal  may  be  regarded  as  mere  surplusage  and  the  instrument 
ratified  by  parol.^ 

(2)  llatijication  of  contract  required  hi/  Statute  of  Frauds  to 
be  in  writing.  Unless  the  statute  provides  otherwise,  a  contract 
required  by  the  Statute  of  Frauds  to  be  in  writing  may  be  rati- 
fied by  parol.^  It  has  been  seen  that  in  some  States  the  Statute 
of  Frauds  provides  that  where  a  contract  is  required  to  be  in 
writing  and  signed  by  the  party  to  be  charged,  or  his  agent 
thereunto  duly  authorized,  such  authority  to  the  agent  must 
also  be  in  writing.''  Under  the  rule  stated  above,  it  seems 
clear  that  when  such  a  contract  is  executed  by  the  agent  with- 
out due  authorization,  his  act  can  be  ratified  only  by  an  instru- 
ment in  writing.^  It  is  held  in  one  State,  however,  that  a  parol 
ratification  is  sufficient.^  If  the  agent  had  written  authority, 
but  departed  from  it  by  signing  a  contract  not  authorized  by 
the  instrument  of  agency,  a  parol  ratification  of  the  contract 
as  signed  is  unavailing.^ 

§  41.    (V.)   Legality  or  validity  of  act  ratified. 

It  is  a  general  rule  that  the  principal  may  ratify  any  act 
which  he  could  have  authorized,^  and  whether  lawful  or  unlaw- 

1  Mclntyre  v.  Park,  11  Gray  (Mass.),  102;  Holbrook  v.  Chaniberlin, 
116  Mass.  155. 

2  Adams  v.  Power,  52  Miss.  828. 
8  Maclean  v.  Dunn,  4  Bing.  722. 

*  Ante,  §  26. 

6  McDowell  /'.  Simpson,  3  Watts  (Pa.),  129;  Hawkins  v.  McGroariy, 
110  Mo.  516.  This  view  fin<ls  some  su])port  in  the  case  of  Ragan  v.  Che- 
nault,  78  Ky.  545,  in  which  it  is  held  that  where  a  statute  proviiles  that 
an  agent  cannot  make  a  contract  of  suretyship  without  written  authority, 
a  parol  ratification  is  insufiicient. 

8  Hammond  v.  Hannin,  21  Mich.  374. 

*  Kozel  i\  Dearlove,  144  111.  23. 

8  McCracken  v.  City  of  San  Francisco,  16  Cal.  591 ;  City  of  Findlay  v. 
Pertz,  G6  Fed.  Rep.  427. 


BY   KATIFICATION.  57 

ful.^  As  he  may  authorize  an  act  resulting  in  tort  as  well  as 
an  act  resulting  in  contract,  so  he  may  ratify  the  one  as  well 
as  the  othcr.2  --pi^g  adoption  of  the  benefits  of  an  act  made 
with  knowledge  of  the  material  facts,  carries  with  it  the  bur- 
dens of  the  act,  whether  those  burdens  arise  from  contract  or 
from  tort. 

§  42.  Exceptions  to  rule  :  giving   notice. 

An  exception  to  the  general  rule  is  found  in  the  case  of  no- 
tice in  behalf  of  an  alleged  principal  where  the  notice  is  one 
of  an  existing  intent,  and  must  be  authoritatively  given  within 
a  specified  time.  Such  notice  cannot  be  given  by  a  stranger, 
or  by  an  agent  in  excess  of  authority,  and  be  subsequently 
ratified  after  the  specified  time  has  expired,  so  as  to  avail  the 
principal.^  The  reason  is  that  the  party  notified  has  a  right 
to  know,  not  merely  the  facts  on  which  the  notice  is  based,  but 
the  existing  intent  of  the  principal  with  reference  to  such  facts 
so  far  as  they  concern  the  one  notified.  This  he  is  not  informed 
of  authoritatively,  and  it  is  immaterial  that  there  is  a  subsequent 
authority.  Thus,  if  X  is  indorser  on  a  bill  which  has  been 
dishonored,  a  notice  of  dishonor  given  him  by  A,  who  is  a 
stranger  to  the  bill  and  to  the  holder,  will  not  avail  the  holder, 
and  it  seems  is  incapable  of  ratification  by  the  holder.*  In 
this  case  the  holder  could  have  authorized  A  to  notify  X,  but 
cannot  ratify  the  act  where  it  was  unauthorized,  or  at  least 
cannot  ratify  it  after  the  time  allowed  for  notice  by  the  law 
merchant  has  expired.  So  a  notice  to  quit  by  two  out  of  three 
joint  owners  will  not  avail  as  against  a  tenant.  "  The  rule  of 
law,  that  omnis  ratihahitio  retrofraJiitur,  etc.,  seems  only  appli- 
cable to  cases  where  the  conduct  of  the  parties  on  whom  it  is 
to  operate,  not  being  referable  to  any  agreement,  cannot  in  the 
mean  time  depend  on  whether  there  be  a  subsequent  ratifica- 

1  Hilbery  v.  Ilatton,  2  II  &  C.  822;  Whitehead  v.  Taylor,  10  A.  & 
E.  210. 

2  Dempsey  v.  Chambers,  154  Mass.  330. 

3  Doe  V.  Walters,  10  B.  &  C.  626 ;  Doe  v.  Goldwin,  1  G.  &  D.  463. 

*  Stewart  c.  Kennett,  2  Camp.  177;  Brower  v.  Wooten,  2  Taylor 
(N.  C),  70;  Chanoine  v.  Fowler,  3  Wend.  (X.  Y.)  173. 


58  FORM.VnOX    OF   AGENCY 

tion."  ^  Neither  can  there  be  a  ratification  if  the  rights  of 
strangers  have  intervened,  even  though  the  stranger  knows  of 
the  unauthorized  contract.^  "  The  act  of  ratification  must  take 
place  at  a  time,  and  under  circumstances,  when  the  ratify- 
ing i»arty  might  himself  have  lawfully  done  the  act  which  he 
ratifies."  ^ 

§  43.     Exceptions  to  nile  :  void  acts. 

The  converse  of  the  rule  is  that  an  act  which  could  not  have 
been  authorized  cannot  be  ratified.  It  may  be  that  the  act  if 
done  by  the  principal  or  by  an  authorized  agent  would  have 
been  void  ;  if  so,  a  ratification  would  be  void.*  This  generally 
involves  the  question  of  competency  of  the  party,  or  the  form 
of  the  act.  Or  it  may  be  that  the  act  if  done  by  any  one 
would  have  been  illegal ;  if  so,  the  ratification  would  be 
illegal,  certainly  if  the  act  continues  to  be  illegal  when  rati- 
fied.^ But  there  may  be  two  special  cases.  First,  the  act 
may  be  legal  when  done  but  illegal  Avhcn  ratified,  or  second, 
the  act  may  be  illegal  when  done  but  legal  when  ratified.  In 
either  case  the  ratification  is  probably  inoperative.  In  the 
first  case,  because  when  the  contract  became  illegal  the  offer 
must  be  regarded  as  revoked  and  a  subsequent  acceptance  of 
it  would  be  too  late.  In  the  second  case,  because,  as  the  rati- 
fication relates  back  to  the  time  of  the  unauthorized  contract, 
it  would  bring  into  existence  a  contract  illegal  when  made.^ 

§44.     Exceptions  to  rule:   ratification  of  forgery. 

A  special  instance  in  the  law  of  ratification  is  presented  in 
the  case  of  forgery.  If  A  forges  the  name  of  B  to  an  instru- 
ment, can  B  ratify  the  forgery  ?  This  is  a  vexed  question  on 
which   there  is  no  agreement.     It  is  contended,  on  the  one 

1  Ri^ht  V.  Cuthf>n,  o  East,  491. 

2  Pollock  V.  Cohen,  32  Oh.  St.  514;  Taylor  v.  Robinson.  1  1  Cal.  306; 
Donelly  v.  Pophatn,  1  Taunt.  1. 

8  Bird  r.  l»ro\vn,  4  Kxch.  780. 

*  Arniitage  v.  Widoe,  3(5  Midi.  124;  Milford  v.  Water  Co.,  124  Pa.  St. 
610;  Irvine  v.  Union  Bank,  2  App.  Cas.  306. 

6  Milford  V.  Water  Co.,  124  Pa.  St.  610. 

•  Milford  V.  Water  Co.,  supra. 


BY   RATIFICATION.  59 

hand,  that  so  far  as  the  rights  and  liabilities  of  B  are  con- 
cerned there  is  no  more  reason  why  lie  may  not  ratify  the 
written  contract  than  why  he  might  not  ratify  the  same  con- 
tract if  it  rested  in  parol.^  But  it  is  contended,  on  the  other 
hand,  that  one  who  commits  a  forgery  does  not  assume  to  act 
as  agent  of  the  person  whose  name  is  forged  ;  that  the  only 
conceivable  motive  for  ratification  is  to  conceal  a  crime;  that 
the  doctrine  of  ratification  does  not  apply,  and  the  person  at- 
tempting to  ratify  is  not  bound.^  While  this  conflict  exists 
as  to  ratification,  it  is  generally  agreed  that  the  doctrine  of 
estoppel  is  applicable  in  cases  where  the  attempted  ratification 
leads  innocent  third  persons  to  change  their  legal  position,  or 
lose  or  impair  their  legal  rights.^  There  is  also  agreement  on 
the  proposition  that  no  ratification  or  estoppel  on  the  part  of 
the  principal  can  deprive  the  State  of  the  right  to  prosecute  the 
wrong-doer  for  forgery.  ^ 

2.    Legal  Effects  of  Ratification. 

§  45.     Ratification  is  irrevocable. 

Ratification  bears  many  analogies  to  acceptance  of  an  offer. 
Among  others  is  the  rule  that  when  once  the  principal  has, 
with  knowledge  of  the  facts,  free  from  mistake  or  fraud, 
adopted  the  act  of  the  assumed  agent  as  his  own,  he  cannot 
afterward  withdraw  his  ratification.^ 

§  46.     Effect  as  between  principal  and  third  party. 

Ratification  relates  back  to  the  time  of  the  contract  or  act 
ratified,  and  the  principal  and  third  party  are  in  the  same 

1  Greenfield  Bank  v.  Crafts,  4  Allen  (Mass.),  447;  Hefner  v.  Vaudolah, 
62  111.  483;  IIo^Yard  v.  Duncan,  3  Lans.  (N.  Y.)  174. 

2  Henry  v.  Heeb,  114  Ind.  275;  Workman  v.  Wright,  33  Oh.  St.  405; 
Shisler  v.  Vandike,  92  Pa.  St.  447 ;  Owsley  v.  Philips,  78  Ky.  517 ;  Brook 
V.  Hook,  L.  R.  6  Ex.  89 ;  INl'Kenzie  v.  British  Linen  Co.,  L.  R.  6  App. 
Cas.  82. 

8  M'Kenzie  v.  British  Linen  Co.,  supra;  Casco  Bank  v.  Keene,  53  Me. 
103 ;  Rudd  v.  Matthews,  79  Ky.  479;  Corser  v.  Paul,  41  N.  H.  24. 

*  M'Kenzie  v.  British  Linen  Co.,  supra. 

*  Brock  V.  Jones,  16  Tex.  461;  Jones  i-'.  Atkinson,  68  Ala.  167;  Smith 
V.  Cologan,  2  T.  R.  188  ». 


60  FORMATION    OF   AGENCY 

position  as  if  the  act  has  been  at  that  time  authorized.^  The 
principal  becomes  immediately  liable  upon  the  contract,  and 
liable  as  well  as  lor  any  fraud  committed  by  the  agent  in  its  for- 
mation,- or  any  tort  connected  with  its  performance."  If  it  is 
merely  an  act  and  not  a  contract  which  is  adopted,  the  princi- 
pal becomes  liable  for  torts  committed  within  the  scope  of  the 
act.^  On  the  other  hand,  tlic  question  as  to  whether  the  third 
person  is  bound  by  a  ratification  without  a  new  assent  on  his 
part  depends  on  the  question  whether  the  third  person  has  a 
right  to  recede  from  the  contract  before  ratification.  This  has 
already  been  discussed,^  with  the  result  that  it  seems  justifi- 
able to  say,  at  least  in  this  country,  that  the  third  party  is  not 
bound  unless  he  has,  by  leaving  the  contract  unrevoked,  signi- 
fied his  willingness  to  be  bound.  But,  of  course,  such  assent 
on  the  part  of  the  third  person  would  also  relate  back  to  the 
time  of  the  original  contract  and  create  obligations  against 
liim  as  of  that  datc.^ 

§  47.     Effect  a3  between  principal  and  strangers. 

While  as  between  the  parties  ratification  relates  back  to  the 
time  of  the  original  transaction,  it  cannot  by  so  doing  cut  off 
the  intervening  rights  of  strangers  to  the  transaction.  Pur- 
chasers of  the  subject-matter  of  the  contract,  attaching  credi- 
tors, and  others  who  acquire  intervening  rights  in  the 
subject-matter  of  the  contract,  are  protected  from  the  effects 
of  a  subsequent  ratification.'^ 

§  48.     Effect  as  between  principal  and  agent. 

Since  ratification  is  equivalent  to  prior  authority  it  follows 
that  the  agent  after  ratification  is,  if  he  has  fully  informed  his 

1  Fleckner  v.  Bank  of  U.  S.,  8  Wheat.  (U.  S.)  338 ;  Grant  v.  Beard,  50  N. 
II.  120. 

2  Nat.  Life  Ins.  Co.  v.  Mincli,  53  X.  Y.  144;  Lane  v.  Black,  21  W.  Ya. 
617;  Fairchild  v.  Mc:Mahon,  139  N.  Y.  290. 

'  Xim3  I'.  Mount  Ilermon  Boys'  School,  160  Mass.  177. 

*  Dempsey  v.  Chambers,  154  Mass.  330. 

6  Ante,  §  38. 

"  AVisconsin  v.  Torinus,  26  Minn.  1. 

•^  Ante,  §  42;  Wood  v.  McCain,  7  Ala.  800;  Taylor  v.  Robinson,  14  Cal. 
890;  McCracken  u.  City  of  San  Francisco,  16  Cal.  591;  Cook  v.  Tullis,  18 
Wall.  (L\  S.)  332;  Bird  v.  Brown,  4  Exch.  786. 


BY    KATIFICATION.  61 

principal  as  to  the  facts,  in  the  same  position  as  if  he  had  pos- 
sessed prior  authority  to  do  the  acts  involved  in  the  transac- 
tion.^  He  is  no  longer  responsible  unless  he  would  have  been 
responsible  had  he  done  the  acts  under  express  authority.* 
But  the  agent  must,  to  excuse  himself,  not  only  act  in  good 
faith,  but  he  must  also  be  sure  that  he  is  not  mistaken  as  to 
the  facts  communicated.  A  false  statement,  whether  wilful  or 
innocent,  which  induces  the  principal  to  ratify,  will  involve  tlie 
agent  in  liability  to  his  principal  for  loss  or  damage  which  ac- 
crues because  the  fact  is  otherwise  than  stated.^  Moreover, 
the  same  conduct  which  might  amount  to  ratification  as  be- 
tween the  principal  and  the  third  party  will  not  always  be  so 
construed  in  favor  of  the  agent  in  order  to  relieve  him  from 
liability  for  his  own  wrongful  act.* 

§  49.     Effect  as  between  agent  and  third  party. 

An  agent  after  ratification  of  his  unautliorized  act  by  his 
principal  is  in  the  same  relation  to  the  third  party  as  if  the 
acts  had  been  previously  authorized.  The  principal  alone  is 
generally  liable  on  a  contract  which  he  has  ratified,^  though, 
if  the  third  party  is  free  to  accept  or  reject  the  ratification  and 
chooses  to  reject,^  the  agent  would  be  liable  on  his  warranty 
of  authority.'''  But  since  prior  authority  will  not  relieve  an 
agent  from  liability  for  a  tort,  obviously  subsequent  ratification 
■will  not ;  ^  although  the  agent  may  claim  indemnity  against 
the  principal  if  sued  for  the  tort  in  like  case  where  he  could 
under  prior  authority.^ 

1  Spittle  V.  Lavender,  2  Brod.  &  Bing.  452 ;  Risbonrg  v.  Bruckner, 
3  C.  B.  N.  s.  812;  Gelatt  v.  Ridge,  117  Mo.  553. 

2  Pickett  V.  Pearsons,  17  Vt.  470 ;  "Woodward  v.  Suydam,  11  Ohio,  360; 
Bray  v.  Gunn,  53  Ga.  144. 

3  Bank  of  Owensboro  v.  Western  Banli,  13  Bush  (Ky.),  526. 
*  Triggs  V.  Jones,  46  Minn.  277. 

^  Story  on  Agency,  §  244. 
^  As  to  which  see  ante,  §  38, 

7  See  post,  %  183. 

8  Josselyn  v.  McAllister,  22  Mich.  300 ;  Richardson  v.  Kimball,  28  INIe. 
463 ;  Wright  v.  Eaton,  7  Wis.  595. 

»  Post,  §  85. 


62  FORMATION   OF   AGENCY 


CHAPTER  TV. 

FORMATION   OF   THE   RELATION    BY    ESTOPPEL. 

§  50.     Agencies  not  resting  on  actual  assent. 

The  agencies  by  agreement  and  by  ratification  rest  on  as- 
sent. The  agent  is  either  appointed  by  the  j)i-incipal  to  carry 
out  tlie  will  of  the  latter,  or  the  latter  adopts  the  act  of  the 
agent  as  an  expression  of  his  own  will.  The  agencies  we  have 
now  to  consider  do  not  rest  upon  assent,  but  are  created  by 
the  law  on  grounds  of  public  policy  or  convenience,  irrespective 
of  the  consent  of  the  principal.  In  these  agencies  the  prin- 
pal  has  either  given  no  authority  whatever,  or  has  not  given 
an  authority  extensive  enough  to  warrant  the  act  done  by  the 
agent.  Yet  if  there  be  ground  to  estop  the  principal  from 
denying  the  authority,  or  if  there  be  an  unforeseen  necessity 
urgent  enough  to  enlarge  the  authority,  the  principal  may  be 
held  liable  for  the  agent's  act.     And  first  of  estoppel. 

§  51.     Meaning  of  estoppel. 

Estoppels  may  arise  (1)  from  a  record,  (2)  from  a  deed,  (3) 
from  a  contract,  or  (4)  from  a  misrepresentation,  which  mis- 
representation may  be  either  by  words  or  by  conduct.  Es- 
toppels arising  from  contract  or  from  misrepresentation  are 
usually  termed  estoppels  in  pais,  a  phrase  frequently  used  but 
conveying  in  itself  no  very  definite  notion.  In  the  law  of 
agency  we  are  mainly  concerned  with  estoppels  arising  fi'om 
misrepresentations. 

Misrepresentation  may  be  ])y  words  or  by  conduct,  and  may 
be  made  by  the  person  sought  to  be  estopped  acting  alone  or 
by  a  third  person  who  is  aided  therein  by  the  act  or  omission 
of  the  person  sought  to  be  estopped.  For  example,  the  defend- 
ant represents  that  he  is  a  member  of  a  firm  :  he  is  estoi)pcd 
to  deny  the  truth  of  his  representation.^     The  defendant  has 

1  Sherrod  v.  Laugdon,  21  Iowa,  518 ;  Poillou  v.  Secor,  Gl  N.  Y.  456. 


BY    ESTOPPEL.  63 

been  a  member  of  a  firm  but  withdraws  from  it  without  giv- 
ing notice  of  his  withdrawal  to  those  who  had  previously  been 
dealing  with  the  firm :  he  is  estopped  to  deny  that  he  is  a 
member  as  against  those  who  continue  to  deal  in  the  belief 
that  he  is  still  a  member.^  Again,  a  third  person  without  de- 
fendant's knowledge  or  consent  holds  him  out  as  a  member  of 
a  firm :  defendant  is  not  estopped  to  deny  the  partnership.^ 

Estoppel  is  the  bar  which  the  law  raises  to  prevent  a  man 
^from  proving  that  a  fact  is  contrary  to  what  he  represented  it 
•to  be.^  It  is  based  upon  the  idea  that  when  one  man  induces 
another,  or  aids  to  induce  another,  to  believe  in  the  truth  of 
that  which  appears  to  be  true,  he  ought  not  afterward  to  be 
permitted  to  deny  that  it  is  true,  if  the  other  has  been  misled 
by  the  representation  to  his  damage*  "  It  proceeds  upon  the 
ground  that  he  who  has  been  silent  as  to  his  alleged  rights 
when  he  ought  in  good  faith  to  have  spoken,  shall  not  be 
heard  to  speak  when  he  ought  to  be  silent."  ^  The  old  notion 
that  "  estoppels  are  odious,"  based  upon  the  technical  estoppels 
by  record  or  by  deed,  has  no  application  to  estoppels  based 
upon  misrepresentation  or  upon  conduct  equivalent  to  misrep- 
resentation.^ 

The  misrepresentation  may  be  made  by  express  statement 
or  by  conduct  which  the  reasonable  man  would  construe  as 
equivalent  to  an  express  statement.  The  estoppel  may  there- 
fore arise  from  contract,  or  from  words  or  conduct,'^  and  the 
words  or  conduct  may  consist  in  express  representations  or 
in  implied  representations.^  The  essence  of  estoppel  in  pais 
is  that  a  false  impression  has  been  created  by  one  man  upon 
the  mind  of  another  as  to  the  existence  or  non-existence  of 


•  Stimson  v.  Whitney,  130  ^lass.  591  ;  Arnold  v.  Hart,  176  111.  442. 
2  First  X.  B.  V.  Cody,  93  Ga.  127;  Marschall  v.  Aiken,  170  Mass.  3. 
8  Ewart  on  Estoppel,  pp.  3-4. 

*  Pickard  v.  Sears,  6  A.  &  E.  469 ;  Ewart  on  Estoppel,  pp.  5-7. 

5  Morgan  v.  Railroad,  96  U.   S.  720 ;   Burkinshaw  v.  Nicolls,  L.  R. 
App.  Cas.  1004. 

6  Ibid. ;  Horn  v.  Cole,  51  N.  H.  287. 

''  Bigelow  on  Estoppel  (5th  ed.),  453. 
8  Ibid.,  556,  570. 


64  FORSIATION   OF   AGENCY 

some  fact,  upon  the  strength  of  which  the  latter  is  induced  to 
change  his  legal  position. 

Wliere  the  representation  is  made  by  cxpi'css  statement,  it 
is  not  necessary,  in  ordei-  to  \\-ork  an  estoppel,  that  the  one 
making  the  statement  should  know  it  to  be  false,  or  should 
even  make  it  recklessly,  consciously  ignorant  of  its  truth  or 
falsity.^  He  may  make  it  in  good  faith,  believing  it  to  be  true, 
and  yet  be  estopped  by  it.  It  is  enough  that  ho  may  reasonably 
anticipate  that  the  other  i)arty  will  act  upon  it.  Where,  how- 
ever, the  estoppel  is  based  upon  the  silence  or  non-action  of 
the  one  sought  to  be  estopi)ed  and  the  niisrei)rescntation  of 
some  third  party,  the  cstop))el  will  not  be  raised  against  the 
former  unless  he  knows  that  such  misrepresentation  is  actually 
being  made.^  For  example,  a  third  party  represents  that 
defendant  is  a  partner  with  him:  defendant  is  not  estopped 
to  deny  this  unless  he  has  stood  silent,  knowing  the  misrepre- 
sentation to  be  made.^  Again,  defendant  is  a  by-stander  while 
an  auctioneer  sells  goods  to  plaintiff  which,  in  fact,  belong  to 
defendant :  the  latter  is  estopped  to  set  up  his  title,  if  he  knew 
the  misrepresentation  as  to  ownership  was  false,  but  not  if  he 
was  ignorant  of  his  own  title.* 

§  52.     Application  to  the  lavy  of  agency. 

The  application  of  this  doctrine  to  the  law  of  agency  is  of 
the  fii'st  importance.  It  may  be  involved,  not  only  in  the 
question  as  to  the  existence  of  the  agency,  but  also  in  the 
question  as  to  its  nature  and  extent.  Heretofore  we  have 
seen  that  a  ])rinci})al  may  be  bound  by  the  act  of  an  agent, 
either  because  he  authorized  it  or  because  he  ratified  it.  We 
have  now  to  observe  that  he  may  be  bound,  when  he  neither 
authorized  nor  ratified,  upon  the  doctrine  that  he  has,  by  his 
representations  or  conduct,  led  third  persons  to  believe  that 
the  agent  possessed  the  requisite  authority,  and  is  therefore 
estopped  to  deny  it. 

1  Brookhaven  v.  Smith,  118  N.  Y.  634;  Stevens  v.  Ludlum,  40  ^linn. 
160;  Ewart  on  Estoppel,  pp.  83-97. 

2  Kwart  on  Estoppel,  pp.  83-97. 

8  First  N.  B.  v.  Cody,  93  Ga.  127. 
*  rickaid  V.  Sears,  G  A.  &  E.  460. 


BY   ESTOPPEL.  65 

(1)  JEstoppel  may  he  relied  upon  to  establish  the  agency. 
When  one  knowingly  and  without  dissent  permits  another  to 
act  for  him  in  a  particular  transaction,  or  in  a  general  course 
of  transactions  of  which  the  particular  transaction  is  one,  he 
will  be  estopped  from  denying  the  agency  of  such  other 
as  against  one  who  in  good  faith,  and  in  the  exercise  of  rea- 
sonable prudence,  has  dealt  with  such  apparent  agent  relying 
on  such  apparent  authority.^  To  work  this  estoppel  it  is 
necessary  that  the  party  misled  should  be  so  misled  by  the 
representations  or  conduct  of  the  alleged  principal ;  if  he  is 
misled  by  the  representations  of  the  agent,  the  principal  will 
not  be  estopped.^  But  it  is  not  necessary  that  the  representa- 
tion should  be  made  to  the  third  party  directly;  "  it  is  enough 
if  it  is  made  to  another,  and  intended  or  expected  to  be  com- 
municated as  the  representations  of  the  party  making  them  to 
the  party  acting  on  them,  for  him  to  rely  and  act  on."  ^  It 
is,  of  course,  necessary  that  there  should  be  some  representa- 
tion by  words  or  conduct,  in  order  to  create  the  agency  by 
estoppel.'*  Where  an  agent  is  appointed,  but  his  authority  to 
do  any  act  whatever,  is  contingent  upon  the  happening  of  a 
future  event,  the  principal  cannot  be  estopped  to  deny  the 
agency  prior  to  the  happening  of  the  event,  unless  by  conduct 
on  his  part  he  leads  third  persons  to  believe  that  the  contin- 
gency has  happened,  or  has  been  waived.^  So  if  one  entrust 
property  to  the  custody  of  a  dealer  on-  condition  that  it  shall 
not  be  sold  without  prior  specific  authorization,  there  is  no 
agency  whatever,  and,  it  seems,  no  misrepresentation  upon 
which  to  base  an  estoppel  to  deny  the  agency.^ 

1  Bigelow  on  Estoppel  (5th  ed.),  565;  Martin  v.  Webb,  110  U.  S.  7, 
15;  Travellers'  Ins.  Co.  v.  Edwards,  122  U.  S.  457,  468;  James  v.  Rus- 
sell, 92  N.  C.  194;  Simon  v.  Brown,  38  Mich.  552.      See /?os/,  §  243. 

-  Rathbun  r.  Snow,  123  X.  Y.  343. 

3  Stevens  i".  Ludlum,  46  Minn.  161. 

<  Timpson  v.  Allen,  149  N.  Y.  513. 

5  In  re  Cotisort  Deep  Level  Gold  Mines,  1897,  1  Ch.  575;  Rcithbun  r. 
Snow,  123  N.Y.  343. 

8  Bijrgs  V.  Evans,  1894,  1  Q.  B.  88.  But  it  would  seem  that  in  such 
a  case  there  might  be  an  estoppel  to  deny  the  dealer's  ownership  of  the 
article  sold,  where  it  is  one  in  which  he  is  accustomed  to  deal.     See 

5 


66  FORMATION   OF   AGENCY 

(2)  Estoppel  may  he  relied  upon  to  establish  the  extent  of  the 
agency.  While  this  is  to  l)e  distinguished  from  the  estoppel 
to  deny  the  agency,  the  principle  on  which  it  is  based  is  fun- 
damentally the  same.  In  the  one  case  the  defendant  makes 
two  representations,  both  of  which  are  false,  namely,  that  A 
is  his  aiicnt,  and  that  A  as  his  agent  has  certain  authority. 
If  X  relics,  in  good  faith  and  in  the  exercise  of  ordinary 
prudence,  upon  these  representations,  he  may  prevent  the 
defendant  from  denying  either  of  them.  In  the  other  case 
the  defendant  makes  both  representations  ;  but  one  of  them, 
namely,  the  fact  of  the  agency,  is  true,  while  the  other,  namely, 
the  extent  of  the  agency,  is  false.  He  is  equally  prevented 
from  denying  either  of  them;  but  he  is  prevented  from  deny- 
ing the  one  because  it  is  true,  while  he  is  prevented  from 
denying  the  other  because  he  has  represented  it  to  be  true.^ 
This  phase  of  estoppel  finds  its  expression  in  the  general  rule 
of  law  that  one  who  deals  with  an  agent  within  the  apparent 
scope  of  his  authority  is  protected.'-^  "  Where  one,  without 
objection,  suffers  another  to  do  acts  which  proceed  upon  the 
ground  of  authority  from  him,  or  by  his  conduct  adopts  and 
sanctions  such  acts  after  they  are  done,  he  will  be  bound, 
although  no  previous  authority  exists,  in  all  respects  as  if  the 
requisite  power  had  been  given  in  the  most  formal  manner. 
If  he  has  justified  the  belief  of  a  third  party  that  the  person 
assuming  to  be  his  agent  was  authorized  to  do  what  was  done, 
it  is  no  answer  for  him  to  say  that  no  authority  had  been 
given,  or  that  it  did  not  reach  so  far,  and  that  the  third  party 
had  acted  upon  a  mistaken  conclusion.  He  is  estopped  to 
take  refuge  in  such  a  defence.  If  a  loss  is  to  be  borne,  the 
author  of  the  error  must  bear  it."  ^ 

The  doctrines  elsewhere  set  forth  as  to  the  extent  of  an 
agent's  authority  to  bind  his  principal*  are  based  upon  the 

Pickering  v.  Busk,  15  East,  38;   Ewart  on  Estoppel,  pp.  2-16,  484;  Levi 
V.  Booth,  58  Md.  305. 

1  Bickford  v.  Menier,  107  N.  Y.  490. 

2  Post,  §  102  et  seq. 

8  Bronson's  Ex'r  v.  Chappell,  12  Wall.  (U.  S.)  681.     See  also  HiU  v. 
Wand,  47  Kans.  340 ;  Ewart  on  Estoppel,  pp.  501-512. 
♦  Post,  §§  102-106. 


BY   ESTOrPEL.  67 

doctrine  of  estoppel  so  far  as  tliey  include  acts  beyond  tbe 
authority  conferred.  Assuming  an  agent  to  have  been  ap- 
pointed for  some  purpose  and  authorized  to  do  some  acts,  the 
liability  of  the  principal  for  acts  beyond  the  authority  con- 
ferred may  rest  upon  various  specific  considerations,  but 
all  or  most  of  them  may  be  reduced  to  the  basis  of  estoppel. 
Briefly  stated,  the  elements  to  be  considered  in  fixing  the 
principal's  liability  are:  (1)  the  power  actually  conferred; 
(2)  the  powers  reasonably  necessary  in  the  execution  of 
those  actually  conferred ;  ^  (3)  the  powers  annexed  by  custom 
or  usage  to  the  agency  in  question,  considered  either  as  to 
the  nature  of  the  agency,  or  as  to  the  place,  time,  or  cir- 
cumstances under  which  it  is  to  be  exercised  ;2  (4)  the 
powers  (in  addition  to  those  above  named)  which  the  prin- 
cipal, by  his  words  or  conduct,  reasonably  leads  third  persons 
to  believe  that  his  agent  possesses.  Now  the  last  of  these 
elements  rests  indubitably  upon  estoppel  and  can  find  no 
other  doctrine  in  the  law  applicable  to  it.^  But  the  second 
and  third  of  the  elements  enumerated  may  be  referred  either 
to  a  doctrine  of  "  implied  authority "  or  to  a  doctrine  of 
estoppel.  It  is  sometimes  said  that  it  will  always  be  implied 
that  a  principal  has  conferred,  together  with  the  express 
authority,  the  auxiliary  authority  reasonably  necessary  to  its 
execution,  or  the  authority  usually  incident  to  the  particular 
agency.*  It  must  be  remembered,  however,  that  the  fact  may 
be  otherwise,  and  that  it  is  necessary  to  invoke  the  doctrine 
of  estoppel  in  order  to  prevent  the  principal  from  asserting 
the  fact.  Having  by  creating  the  agency  represented  that 
the  agent  has  the  authority  incidental  to  it  or  affixed  to  it  by 
custom,  lie  will  not  afterward  be  heard  to  say  that  the  agency 
was  by  express  stipulations  confined  within  narrower  limits. 

1  "  When  one  commands  a  thing  to  be  done,  he  impliedly  commands 
all  [convenient]  means  to  be  used  for  doing  this."  Argument  of  counsel 
in  Southerne  v.  Howe,  2  RoUe's  Rep.  5,  26  (1618). 

2  Anonymous,  12  Mod.  514  (1701)  ;  Nickson  v.  Brohan,  10  Mod.  109 
(1712). 

3  Johnson  v.  Hurley,  115  Mo.  513;  Bradish  v.  Belknap,  41  Vt.  172. 
Iluutley  V.  Mathias,  90  N.  C.  101. 


C8  •  FOKMATION   OF   AGENCY 

This  is,  of  course,  subject  to  the  qualification  tliat  the  third 
party,  in  dealing  with  the  agent,  does  not  know  of  the  express 
liuiitation  upon  the  incidental  or  customary  powers.  Ex- 
amples of  such  estoppels  arc  discussed  in  subsequent  sections.^ 
It  will  be  observed  that  the  doctrine  of  estoppel  is  applicable 
only  to  cases  where  a  representative  is  authorized  to  make 
promises  or  representations  upon  which  third  persons  are 
invited  to  act,  that  is,  it  is  applicable  to  a  princii»al  who 
authorizes  his  agent  to  create  primary  obligations,  but  not  to 
a  master  who  never  authorizes  his  servant  to  create  such 
obligations.^ 

§  52  a.     Application  to  agent's  torta. 

In  most  cases  of  tort,  the  doctrine  of  estoppel  is  inapplicable. 
The  liability  of  the  master  for  the  servant's  unauthorized 
torts  rests  upon  other  and  different  considerations.^  But 
there  is  one  class  of  torts,  so-called,  which  properly  belong 
inider  the  head  of  principal  and  agent,  rather  than  that  of 
master  and  servant,  and  this  because  they  arise  out  of 
agency  instead  of  service,  and  the  principal's  liability  for 
them  rests  upon  grounds  similar  to  those  that  fix  the  liability 
of  a  princii)al  for  his  agent's  contracts.'* 

If  in  conducting  the  agency  the  agent  makes  a  representation 
which  is  either  naturally  incidental  to,  or  customary  in,  such 
agencies,  the  principal  will  be  estopped  to  deny  that  the  agent 
had  authority  to  make  it  as  against  one  who  reasonably  relies 
upon  it  to  his  prejudice.^  In  ordinary  cases  of  tort,  there  is 
no  estoppel  because  the  third  party  has  not  changed  his 
position  in  consequence  of  any  act  of  the  agent ;  but  in 
deceit  and  torts  analogous  to  deceit,  the  third  party  does 
change  his  })<)sition  relying  upon  the  agent's  rci»resentation, 

1  Post,  §§  1O0-116. 

2  Ante,  §§  4-5;  pout,  §  243. 

«  A  nte,  §  5 ;  post,  §  242  et  seq. 

*  Ewart  on  Estoppel,  pp.  496-501 ;  post,  §  148  f/  seq. 

6  Bank  of  Hatavia  v.  New  York,  &c.  R.,  106  N.  Y.  1  ■"':  Haskell  v. 
Starbird,  152  Mass.  117;  contra,  Britisli  IMutual  Bankint:  Co.  r.  Charn- 
wood  Forest  Ry.,  L.  R.  18  Q.  B.  D.  714;  Friedlauder  v.  ily.,  130  U.  S. 
416. 


BY    ESTOPPEL.  69 

and  the  principal  is  estopped  to  deny  the  agent's  anthority 
to  make  such  representation  where  he  has  clothed  his  agent 
with  the  apparent  authority  to  make  it.  If  now  the  represen- 
tation is  false  and  known  to  the  agent  to  be  false,  and  the 
third  party  relies  upon  it  to  his  damage,  the  principal  should 
be  liable  just  as  he  should  be  for  an  excess  or  abuse  of 
authority  in  making  a  contract  under  like  circumstances. 

The  application  of  this  doctrine  would  reconcile  the  con- 
flict in  regard  to  the  liability  of  a  principal  for  fraudulent 
representations  made  by  an  agent  for  his  own  benefit,  as  in 
the  case  of  the  issue  of  fictitious  stock  by  a  transfer  agent  or 
of  fictitious  bills  of  lading  by  a  shipping  agent.^  It  is  ad- 
mitted that  a  bank  cashier  has  authority  to  certify  checks, 
and  that  therefore  his  certification  binds  the  bank,  although 
it  falsely  states  that  the  drawer  has  funds  when  he  has  not.^ 
It  is  admitted  that  a  shipping  clerk  has  authority  to  certify 
to  the  delivery  of  goods,  but  it  is  denied  that  his  false  cer- 
tificate that  the  shipper  has  delivered  goods  when  he  has  not 
will  bind  the  carrier.^  It  is  obvious  that  the  distinction  can- 
not rest  on  the  nature  of  the  instrument,  for  a  principal  is 
not  bound  upon  an  unauthorized  negotiable  instrument  made  by 
his  agent,  any  more  than  upon  a  non-negotiable  one.  The 
primary  question  in  each  case  is  as  to  the  liability  of  the 
principal  for  his  agent's  act.  In  each  case  the  principal  has 
represented  that  the  agent  had  authority  to  do  the  act,  that 
is,  certify  checks  or  issue  bills  of  lading ;  in  each  case  the 
agent  has  exceeded  his  actual  authority  by  certifying  a  check 
when  the  drawer  had  no  deposit,  or  by  issuing  a  bill  of  lading 
when  the  shipper  had  delivered  no  goods  ;  in  each  case  the 
third  party  who  takes  the  check  or  the  bill  of  lading  relies 
upon  the  representation  of  the  principal  tliat  the  agent  had 
authority  and  upon  the  representation  of  the  agent  that  the 
funds  or  the  goods  Avere  in  the  principal's  custody.  In  one 
case  the  principal  is  held  estopped  to  deny  his  representation 

1  Post,  §§  154-157;  Ewart  on  Estoppel,  pp.  508-511. 

2  Merchants'  Bank  c.  State  Bank,  10  Wall.  (U.  S.)  601. 
*  Friedlauder  v.  Texas  &  Pac.  Ry.,  130  U.  S.  416. 


70  FORMxVTION    OF    AGENCY 

of  authority  ;  in  the  other  not.  The  holding  that  the  principal 
is  estopped  in  hoth  instances  seems  more  consistent  and  is 
justified  upon  the  well  recognized  grounds  of  cstopi)el.^ 

The  true  ground  of  distinction  in  all  of  these  cases  is  that 
the  tort  is  committed  by  an  agent  while  acting  as  agent  and 
not  as  servant,  that  is,  while  engaged  in  making  contracts  or 
representations  for  his  principal.  The  confusion  has  arisen 
from  an  attempt  to  assimilate  these  so-called  torts  to  ordin- 
ary torts  that  consist  simply  in  the  breach  of  an  antecedent 
obligation.  Here  a  voluntary  primary  obligation  is  created. 
A  representation  is  made  with  the  intent  that  third  persons 
shall  act  upon  it,  and  they  do  act  upon  it,  thereby  creating 
the  obligation  to  make  good  the  representation.  The  sole 
question  is'  had  the  third  persons  reasonable  grounds  to 
believe  that  the  agent  was  authorized  to  make  the  representa- 
tion ?  That  question  should  be  answered  upon  precisely  the 
same  doctrines  as  if  the  question  were  whether  the  agent  had 
authority  to  make  a  contract.  There  is  as  much  difference 
between  a  tort  by  a  servant  in  the  course  of  his  employment 
and  this  so-called  tort,  as  between  a  servant's  tort  and  an 
agent's  contract.  We  are  dealing  with  an  agent  and  not 
with  a  servant,  and  in  agency  the  principal's  liability  is 
determined  by  the  doctrine  of  estoppel.^ 

§  53.     Limits  of  the  doctrine. 

The  limits  of  the  doctrine  are  to  be  sought  in  the  general 
law  of  estoppel  by  misrepresentation.  The  rules  may  be 
briefly  summarized  as  follows  :  ^  — 

(1)  The  misrepresentation  must  be  made  by  the  ])rincipal, 
or  by  some  one  having  apparent  authority  from  him  to  make 
it,  or  by  some  one  whose  representation  he  has,  by  some 
disregard  of  duty,  made  credible. 

If  made  by  the  principal  in  person  we  have  the  ordinary 
case  of  estoppel.     If  made  by  one  having  authority  from  him 

1  Farmers'  &  M.  Bank  v.  Butchers'  &  D.  Bank,  IG  N.  Y.  125;  Bank 
V.  R.,  100  N.  Y.  195. 

2  Post,  §§  148-157. 

*  Bigelow  on  Estoppel  (5th  ed.),  p.  570;  Ewart  on  Estoppel,  p.  10, 


BY   ESTOPPEL.  71 

to  make  it,  we  have,  first,  an  estoppel  to  deny  the  agent's 
authority,  and,  second,  an  estoppel  to  deny  the  agent's  mis- 
representation. If  made  by  one  (not  an  agent)  whose  rep- 
resentation he  has  made  credible,  we  have  the  case  of  a 
misrepresentation  by  a  third  party,  aided  by  some  act  or 
omission  by  the  defendant  under  circumstances  where  he 
owed  a  duty  to  use  due  care  to  avoid  harm  or  loss  to  others.^ 

(2)  The  representation  must  be  as  to  a  material  fact,  or  of 
such  a  character  as  may  reasonably  influence  the  conduct  of 
another  person. 

(3)  The  representation  must  be  made  with  the  intent  that 
the  other  party  shall  act  upon  it,  or  in  a  manner  calculated 
to  lead  him  to  act  upon  it. 

(4)  The  other  party  must  be  ignorant  of  the  truth,  and  his 
ignorance  must  not  be  the  result  of  his  own  negligence  or 
bad  faith. 

(5)  The  other  party  must  actually  be  induced  to  act  relying 
on  the  representation. 

Any  further  discussion  of  the  elements  of  estoppel  would 
be  foreign  to  the  purpose  of  this  work.  The  application  of 
the  doctrines  will  appear  in  subsequent  chapters.^ 

1  Ewart  on  Estoppel,  pp.  18-27,  28-67. 

2  Post,  §§  102-116;  §§  149-157. 


FORMATION   OF  AGENCY 


CHAPTER   Y. 

FORMATION    OF   TIIK    KELATION    BY    NECESSITY. 
§  54.     General  doctrine  of  contracts  from  necessity. 

Aside  fruiu  cuiitnicts  which  rest  upon  llic  agreement  of 
the  ]iai'tics  there  is  a  more  or  less  clearly  (.Icfined  class  of 
legal  relations  in  which  obligations  are  enforced  by  contract- 
ual remedies  although  in  fact  no  contract  by  agreement 
existed  between  the  parties.  These  ai'c  called  "contracts 
created  by  law,"  or  "quasi-contracts."^  Such  is  the  obliga- 
tion of  an  infant  to  i)ay  for  necessaries, ^  of  a  man  to  return 
money  recei\'cd  under  mistake,'^  of  a  corporation  to  return 
the  benefits  received  under  a  contract  nltra  vires,'^  or  of  a  man 
to  pay  for  benefits  conferred  uuder  statutory  authority.^  The 
obligation  where  not  a  statutory  one  is  created  by  the  courts 
on  grounds  of  public  policy  to  do  justice  between  the  ])ar(ies. 

The  principle  of  quasi-contractual  obligation  is  aj)plied  for 
the  ])urpose  of  creating  an  agency  where  otherwise  there 
would  be  none.  Such  agency  generally  arises  from  the  nec- 
essity of  the  particular  situation. 

§  55.     Agency  of   wife. 

The  authority  of  a  wife  to  pledge  her  husband's  credit 
may  rest  upon  any  one  of  three  grounds,  namely,  actual 
authority,  ostensible  authority,  or  necessity. 

If  there  be  actual  authority  there  is  simply  the  usual 
agency  by  agreement  heretofore  discussed. 

Ostensible  authority  in  the  case  of  a  wife  may  arise  fi'om 
the   fact  of   cohabitation.     Where    a  husband  and  wife  live 

*  Keener  on  Qiiasi-Contructs,  Chap.  I. 
2  Trainer  v.  Trumbull,  111  Mass.  527. 
8  Keener,  Cliap.  If. 

*  Central  Tran.s.  Co.  v.  Pullman  Car  Co.,  1-30  U.  S.  24. 
6  Steamship  Co.  v.  JoUffe,  2  Wall.  (U.  S.)  450. 


BY    NECESSITT.  73 

together,  there  is  a  presunii)tioii  that  she  is  authorized  to 
pledge  his  credit  for  the  ordinary  and  usual  household  pur- 
chases.i  But  for  purchases  going  beyond  such  as  the  man- 
ager of  a  household  might  reasonably  make,  there  is  no 
presumption  of  authority  from  tlie  fact  of  the  conjugal 
relation  alone  ;  authority,  if  any,  must  be  sought  in  acts  and 
conduct  on  the  part  of  the  husband  calculated  to  induce  third 
persons  to  believe  that  the  wife  has  the  added  authority, 
such,  for  example,  as  having  without  objection  previously 
recognized  and  paid  for  such  i)urchases.2  In  other  words, 
ostensible  authority  rests  upon  the  same  consideratit)ns  here 
as  in  any  other  case,  except  that  the  fact  that  the  wife  man- 
ages the  household  raises  a  presumption  of  authority  to  make 
the  usual  and  ordinary  purchases  for  it.  Where  they  live 
apart  no  such  presumption  arises.-^ 

Authority  by  necessity  is  an  authority  created  by  the  law 
as  a  result  of  the  marital  relation  by  virtue  of  which  the 
wife  has  power  to  pledge  the  husbands'  credit  in  order  to 
obtain  the  necessaries  which  he  has  neglected  or  refused  to 
furnish.^  This  may  exist  even  where  the  husband  has  for- 
bidden the  wife  to  pledge  his  credit,  or  has  notified  third 
persons  not  to  supply  her  upon  his  credit,^  or  where,  with  his 
consent  or  in  consequence  of  his  fault,  she  is  living  apart  from 
him.^  There  may  be  two  theories  on  which  this  result  is 
reached,  —  (1)  that  the  obligation  of  the  husband  is  to  pay 
for  the  necessaries  without  regard  to  the  question  of  agency,' 
or  (2)  that  there  is  a  compulsory  agency  created  by  law 
under  which  the  wife's  act  is  the  husband's  act.^     The  first 

1  Harrison  v.  Grady,  13  L.  T.  Rep.  369;  Flymi  u.  Messenger,  28  Minu. 
208. 

2  Bergh  v.  Warner,  47  Minn.  250. 

3  Viisler  V.  Cox,  53  N.  J.  L.  516;  Johnston  v.  Sumner,  3  Ilurl.  & 
Nor.  261. 

*  Bergh  v.  Warner,  47  Minn.  250.  ^  Ibid. 

6  Jolmston  u.  Sumner,  3  llurl.  &  Nor.  261;  Wilson  v.  Ford,  L.  R. 
3  Ex.  63. 

">  Keener  on  Quasi-Contracts,  pp.  22.  23. 

8  Benjamin  v.  Dockham,  131  Mass.  418 ;  Johnston  v.  Sumner,  3  Ilurl. 
&  Nor.  201. 


74  FORMATION    OF   AGENCY 

theory  finds  color  in  the  fact  that  the  luishand  must  jtay 
even  if  the  wife  be  insane  or  unconscious,  or  even  if  the 
husband  bo  insane.^  In  any  case  the  creditor  must  show  that 
the  husband  neg-lccted  or  refused  to  provide  suitable  suj)port, 
and  that  the  articles  furnished  were  necessaries.  What  are 
necessaries  is  a  question  of  fact  for  the  jury,  cxce])t  where 
the  court  can  positively  declare  that  the  articles  are  not 
necessaries.^ 

§  56.     Agency  of  infant  child  in  purchase  of  necessaries. 

Sonic  of  the  American  courts  enforce  the  doctrine  that  a 
father  is  liable  for  necessaries  furnished  his  infant  child 
wiiere  no  actual  authority  is  vested  in  the  child  to  pledge  the 
father's  credit.  It  is  probably  true  that  slighter  evidence  will 
establish  authority  in  such  cases,  than  in  cases  where  the 
relation  does  not  exist.^  But  in  some  cases  no  evidence  of 
such  authority  exists  at  all,  and  hence  the  agency  cannot  rest 
on  assent.  The  English  and  some  of  the  American  courts 
refuse  to  enforce  any  obligation  under  such  circumstances,* 
but  some  of  our  courts  enforce  it  on  the  same  theory  as  in  the 
case  of  the  compulsory  agency  of  the  wife,^ 

§  57.     Agency  of  shipmaster. 

A  shipmaster  has  authority  in  cases  of  necessity  to  purchase 
supplies  for  the  vessel  and  pledge  the  credit  of  the  owner.^ 
This  is  analogous  to  the  purchase  of  necessaries  by  a  wife  or 

1  Read  v.  Legard,  6  Ex.  636 ;  Cunningham  v.  Reardon,  98  Mass.  538, 
cited  by  Keener  on  Quasi-Contracts,  p.  22. 

2  Davis  V.  Caldwell,  12  Cash.  (Mass.)  512. 

8  Clark  V.  Clark,  40  Conn.  586;  Fowlkes  v.  Baker,  29  Texas,  135. 
And  see  Schouler  on  Domestic  Relations,  §  241;  Jordan  r.  AVright,  45 
Ark.  237;  Freeman  r.  Robinson,  38  N.  J.  L.  383. 

•"  xMortimore  v.  Wright,  6  M.  &  W.  482;  Shelton  v.  Springett,  11  C.  B. 
452;  Kelley  i'.  Davis,  49  N.  H.  187;  Gordon  v.  Potter,  17  Vt.  318;  Free- 
man V.  Robinson,  38  N.  J.  L.  383;  Carney  v.  Barrett,  4  Ore.  171. 

6  Gilley  v.  Gilley,  79  Me.  292;  Cromwell  v.  Benjamin,  41  Barb. 
(N.y.)  558;  Manning  r.  Wells,  8  Misc.  (N.  Y.)  646;  Watkins  v.  De- 
Armond,  89  Ind.  553.  And  see  dictum  in  Dennis  v.  Clark,  2  Cash. 
(Mass.)  317,  352. 

«  McCready  v.  Thorn,  51  N.Y.  454. 


BY   NECESSITY.  75 

child,  in  that  the  plaintiff  in  order  to  recover  must  show  that 
the  supplies  were  in  fact  necessaries.  Such  authority  may, 
indeed,  be  thought  to  be  conferred  by  the  contract  or  assent 
of  the  owner  aided  by  custom,  but  it  is  closely  analogous  to 
the  compulsory  agencies  arising  from  necessity.     So  also  the 

[  shipmaster  has  authority  to  sell  the  cargo  or  even  the  vessel 

\  itself  in  case  of  supreme  necessity .^ 

§  58.     Agency  of  unpaid  vendor. 

An  unpaid  vendor  who  is  still  in  possession  of  the  goods, 
may  re-sell  the  same  as  agent  of  the  vendee  and  charge  the 
vendee  with  the  difference  between  the  contract  price  and  the 
amount  received  on  the  re-sale.  This  agency  arises  "  by 
operation  of  law,"  and  can  be  defeated  by  the  vendee  only  by 
taking  and  paying  for  the  goods. ^ 

§  59.     Other  illustrations. 

The  doctrine  of  agency  by  necessity  has  been  extended  in 
some  modern  cases  to  relations  unknown  to  the  common  law. 
The  most  important  instance  is  that  of  the  employment  of 
medical  attendance  in  railway  accidents.  Is  a  railway  com- 
pany liable  for  services  rendered  by  a  physician  in  the  care  of 
injured  servants  or  passengers,  where  the  services  are  ren- 
dered at  the  request  of  (say)  a  conductor  ?  It  is  held  on  the 
one  side  that  it  is,  on  the  ground  that  the  emergency  creates 
an  agency  by  necessity  in  favor  of  the  highest  railway  official 
on  the  scene  of  the  accident  or  within  reach  by  reasonable 
means  of  communication.^  But  this  conclusion  is  denied  in 
other  jurisdictions.^     The  grade  of  the  officer  may  determine 

1  Pike  V.  Balch,  38  Me.  302;  Gaither  v.  Myrick,  9  Md.  118;  Butler  v. 
Murray,  30  N.  Y.  88 ;  post,  §  116. 

2  Dustan  v.  McAndrew,  44  N.  Y.  72;  Benjamin  on  Sales  (6th  ed.), 
§§  782-795,  and  American  note. 

3  Terre  Haute,  &c.  R.  v.  McMurray,  98  Ind.  358 ;  lb.  v.  Stock^Yell, 
118  Ind.  98;  Toledo,  &c.  R.  v.  Mylott,  0  lud.  App.  438;  Indianapolis, 
&c.  R.  V.  Morris,  67  111.  295. 

*  Sevier  v.  Birmingham,  &c.  R.,  92  Ala.  258;  Peninsular  R.  v.  Gary, 
22  Fla.  356;  Tucker  v  St.  Louis,  &c.  Ry.,  54  Mo.  177.  See  Marquette, 
&c.  R.  V.  Taft,  28  Mich.  289,  where  the  court  was  evenly  divided.  And 
see  Godshaw  v.  Struck,  (Ky.)  58  S.  W.  781;  Central  of  Georgia  R.  v. 
Price,  106  Ga.  176. 


76  FORMATION   OF   AGENCY. 

the  question,  but  if  so,  it  must  be  on  the  ground  of  assent 
and  not  of  necessity.^ 

The  recent  English  case  of  Gwilliam  v.  Twist  ^  is  an 
interesting  one  upon  the  question  of  a  servant's  acquiring 
authority  by  necessity.  The  driver  of  an  omnibus  belonging 
to  defendants  became  intoxicated  while  on  duty  and  was 
taken  from  his  seat  by  a  policeman.  A  man  who  happened 
to  be  standing  near,  volunteered  to  drive  the  omnibus  to  the 
defendants'  yard,  and  the  driver  and  conductor  acquiesced, 
the  former  warning  him  to  drive  carefully.  The  volunteer  in 
negligently  turning  a  corner  ran  over  and  injured  })laintiff, 
who  brought  action  for  damages  against  the  defendants, 
owners  of  the  omnibus.  The  trial  court  held,  with  consider- 
able hesitation,  that  the  defendants  were  liable  for  the  injury, 
placing  its  decision  upon  the  ground  of  agency  by  necessity  ; 
but  the  Court  of  Appeal  reversed  the  decision  on  the  ground 
that  the  necessity  did  not  sufficiently  appear,  since  the  defend- 
ants might  have  been  communicated  with,  and  left  open  the 
question  whether,  if  there  had  been  an  actual  necessity,  the 
defendants  would  have  been  liable.^ 

^  Langan  v.  Great  W.  Ry.,  30  L.  T.  x.  s.  173;  Swazey  v.  Union  Mfg. 
Co.,  42  Conn.  556. 

2  1895,  1  Q.  B.  557;  on  appeal,  1895,  2  Q.  B.  81. 

8  See  also  Sloan  v.  Central  Iowa  Ry.  Co,  62  Iowa,  728;  Fox  v.  Chi- 
cago, &o.  Ry.  Co.,  86  Iowa,  308.     See;;o^/,  §§  239-240. 


TERMINATION    OF   AGENCY   BY   ACT   OF   THE    PARTIES.  77 


CHAPTER   Yl. 

TERMINATION    OF   THE   RELATION. 

§  60.     Ways  in  which  relation  may  be  terminated. 

The  relation  of  principal  and  agent  may  be  terminated,  by 
various  methods,  and  for  convenience  of  treatment,  these 
methods  may  be  classified  as  follows  :  (1)  by  bilateral  act ; 
(2)  by  unilateral  act ;  (3)  by  operation  of  law.  But  to  the 
general  rules  governing  the  termination  of  the  agency  by 
these  means  there  is  an  important  exception,  (4)  where  the 
agency  is  coupled  with  an  interest  or  where  its  revocation 
would  involve  the  agent  in  liability  tov:ard  third  persons. 

1.     Bt/  Bilateral  Act. 
§  61.     By  terms  of  original  agreement. 

The  relation  may  be  limited  by  the  terms  of  the  original 
agreement,  in  any  one  of  the  following  ways  :  (1)  When  the 
contract  by  its  terms  is  to  endure  only  during  a  certain  period 
of  time,  the  expiration  of  that  period  will  dissolve  the  rela- 
tion.i  (2)  When  the  parties  manifestly  contemplate  that  the 
relation  shall  continue  only  until  the  happening  of  a  certain 
event,  the  happening  of  that  event  likewise  operates  as  a  dis- 
solution.2  (3)  When  the  purpose  for  which  the  agency  was 
created  is  accomplished,  either  through  the  instrumentality 
of  the  agent  or  otherwise,  the  agent's  authority  is  terminated.^ 

In  every  case,  it  is  a  question  of  the  intention  of  the  parties, 
and  such  intention,  unless  expressed  by  the  words  of  the  con- 
tract, may  be  implied  from  the  circumstances  of  the  case. 

1  Gundlach  r.  Fischer,  59  III.  172. 

2  Danby  v.  Coutts,  L.  R.  29  Ch.  Div.  500. 

8  Moore  v.  Stone,  40  Iowa,  259;  Short  v.  Millard,  68  111.  292;  Ahern 
V.  Baker,  34  ]\Iinn.  98. 


78  Ti:i:.ML\ATION    OF    AGENCY 

Tims  the  authority  of  an  attorney  engaged  to  conduct  an 
action  terminates  wlicn  judgment  is  rendered.^  An  auction- 
eer's authority  ceases  when  the  sale  is  consummated.-  And  a 
broker's  ceases  when  the  contract  of  sale  is  completed.^ 

4;  62.     By  subsequent  agreement. 

Ao-encv  depends  for  its  existence  upon  the  contract  l)y  which 
it  was  created,  and  consequently  a  subsequent  agreement  be- 
tween the  parties  to  cancel  or  rescind  their  original  contract, 
terminates  the  relation.  The  rescinding  contract,  of  course, 
must  have  the  essential  element  of  consideration,  but  the 
abandonment  by  either  party  of  his  rights  under  the  original 
contract  is  sullicient.* 

2.    By  Unilateral  Act. 

§  63.     Revocation  and  renunciation. 

Having  considered  the  ways  in  which  the  agency  may  be 
terminated  by  the  voluntary  act  of  both  principal  and  agent, 
we  have  now  to  treat  of  its  termination  by  the  act  of  one  party 
alone.  This  may  be  effected,  (1)  by  the  principal's  revoca- 
tion of  his  agent's  authority ;  (2)  by  the  agent's  renunciation 
of  his  authority.  Questions  as  to  remedies  for  breach  of  con- 
tract by  either  principal  or  agent  are  considered  hereafter.^ 

§  64.     Revocation  —  when  possible. 

It  is  clear  upon  principle,  that  since  the  authority  is  con- 
ferred by  the  principal,  and  is  to  be  exercised  on  his  behalf 
and  for  his  benefit,  the  agent  should  not  be  permitted  to  con- 
tinue in  the  exercise  of  such  authority  any  longer  than  the 
principal  desires.  The  relation  is,  in  a  degree,  personal  and 
confidential,  and  the  principal  for  his  own  protection  should 
be  able  to  withdraw  his  confidence  at  will.  It  is  therefore  the 
general  rule  of  law,  subject  to  the  exceptions  hereafter  enu- 

1  MacBeath  r.  Ellis,  4  Bing.  57S ;  Butler  v.  Knight,  L.  R.  2  Ex.  109. 

2  Seton  V.  Slade,  7  Ves.  265. 

*  Blackburn  v.  Scholes,  2  Camp.  3il. 

*  Iluffcut's  Anson  on  Cent.  p.  333  et  seq. 
6  Post,  §§  79-81. 


BY    ACT    OF    TIIF,    PAKTIES.  79 

mernted,^  tliat  the  principal  may  revoke  his  agent's  authority  at 
any  time  before  the  authority  has  been  fully  exercised,  and 
with  or  without  good  cause.^  And  tliis  is  true  even  where  the 
principal  has  expressly  or  imi)liedly  agreed  not  to  revoke.  In 
such  a  case,  however,  the  principal,  although  he  has  the  potcer, 
has  not  the  7ught  to  revoke,  and  the  agent  has  an  action  against 
the  principal  for  any  damages  suffered  by  him  as  a  result  of 
the  rovocati(Hi.^ 

§  65.     Revocation — -what  amounts  to. 

The  revocation  of  the  agent's  authority  may  be  by  the  ex- 
press act  of  the  principal,  or  it  may  be  implied  from  the  cir- 
cumstances of  the  case.  In  the  absence  of  statute,  a  sealed 
or  written  revocation  is  unnecessary,  even  though  the  author- 
ity was  originally  conferred  by  a  formal  instrument.*  The 
cii'cumstances  from  which  a  revocation  will  be  implied  are 
various.  If  tlie  principal,  after  conferring  the  authority,  but 
prior  to  its  execution,  disposes  of  the  subject-matter  of  the 
agency,  or  involuntarily  loses  control  over  it,  a  revocation 
must  necessarily  be  implied.^  For  example,  if  a  principal  con- 
fers authority  upon  an  agent  to  sell  his  house,  and  before  the 
agent  accomplishes  his  object,  the  house  is  destroyed  by  fire 
cr  sold  by  the  principal  himself,  the  agent  is  clearly  deprived 
of  his  power,  and  a  revocation  of  authority  is  therefore  pre- 
sumed. And  so  also,  if  after  conferring  authority  upon  an 
agent  to  perform  a,  specified  act,  necessarily  exclusive,  the 
principal  gives  the  same  power  to  another,  the  authority  of 
the  first  agent  is  thereby  revoked.^  But  it  is  held  that  the 
authority  of  an  agent  to  do  a  specified  act  is  not  necessarily 

1  Post,  §  72. 

2  Hartley's  Appeal,  53  Pa.  St.  212;  Blackstone  v.  Buttermore,  53  Pa. 
St.  266 ;  Chambers  v.  Seay,  73  Ala.  372 ;  Hunt  v.  Rousmanier,  8  Wheat. 
(U.  S.)  174 ;  Venning  v.  Bray,  2  B.  &  S.  502  ;  Warwick  v.  Slade,  3  Camp. 
127. 

8  Chambers  v.  Seay,  supra :  Blackstone  v.  Buttermore,  supra ;  Mao- 
Gregor  v.  Gardner,  14  Iowa,  326. 

*  The  Margaret  Mitchell,  Swabey,  382;  Brookshire  v.  Brookshire, 
8  Iredell  (X.  C.)  Law,  74. 

6  Gilltert  v.  Holmes,  64  111.  548. 

^  Copeland  v.  Mercantile  Ins.  Co.,  6  Pick.  (Mass.)  198. 


80  TERMINATION    OF   AGENCY 

revoked  by  the  subsequent  cmj)loyment  of  another  to  attend 
to  all  business  of  the  principal.^  The  dissolution  of  a  corpo- 
ration or  partnership,  or  tlic  severance  of  the  interests  of  joint 
principals,  revokes  the  autliority  of  agents.^ 

^  G6.     Revocation,  notice  of. 

A  revocation  is  effectual  and  binding-,  only  as  against  those 
who  have  notice  that  it  has  been  made.  Consequently,  in 
order  to  protect  himself,  the  principal  must  communicate  the 
revocation  not  only  to  the  agcnt,^  but  to  all  persons  who,  u[)on 
the  strength  of  his  previous  authority,  are  likely  to  deal  with 
him.^  In  case  the  authority  is  only  for  the  performance  of  a 
special  act,  however,  third  persons  cannot  presume  that  the 
agency  will  continue  after  the  performance  of  that  act,  and 
therefore  no  notice  of  revocation  need  be  communicated  to 
them."  Nor  is  it  necessary  to  give  notice  to  a  sub-agent,  de- 
riving his  authority  from  the  agent  alone. 

The  method  by  which  the  revocation  should  be  communi- 
cated varies  with  each  particular  case,  but  the  notice  must 
always  be  sufficient  to  make  the  knowledge  of  the  revocation 
co-extensive  with  the  knowledge  of  the  authority.  Thus,  to 
persons  who  have  never  dealt  with  the  agent,  a  general  notice 
through  the  medium  of  the  public  press  is  sufficient,  whether 
it  is  seen  or  not.  But  to  persons  who  have  transacted  busi- 
ness with  the  agent,  actual  notice  must  be  given,  or  at  least 
such  knowledge  of  the  revocation  must  be  communicated  to 
them  as  would  serve  to  place  a  prudent  man  uj)on  inquiry.''^    A 

1  Smith  t'.  Lane,  101  Tnd.  449. 

2  Schlater  c.  Wiiipenny,  75  Pa.  St.  321 ;  Rowe  v.  Rand,  111  Tnd.  206; 
Griggs  V.  Swift.  82  Ga.  392. 

8  See  Robertson  v.  Cloud,  47  Miss.  20S.  It  seems  that  a  notice  left  at 
the  agent's  usual  place  of  business  is  enough  to  terminate  the  agency, 
even  before  the  agent  has  actual  notice  of  it.  Rees  i'.  Fellow,  97  Fed. 
Rep.  1G7.     Compare  Shuey  v.  United  States,  92  U.  S,  73. 

*  Tier  r.  T.ampson,  3.5  Vt.  179 ;  Fellows  v.  Hartford,  &c.  Co.,  38  Conn. 
197;  Lamothe  v.  St.  Louis,  &c.  Co.,  17  Mo.  204;  McXeilly  v.  Continental 
Lifeln.s.  Co  ,  66  N.Y.  23. 

6  Watts  V.  Kavanagh,  35  Vt.  34. 

6  ClaHin  v.  Lenheim,  G6  N.  Y.  301,  305. 


BY    ACT    OF    THE    I'AUTIES.  81 

failure  to  protect  third  persons  l)y  due  notice  may  give  rise  to 
an  agency  by  estoppel.^ 

§  67.     Revocatioii,  effect  of,  as  to  principal  and  agent. 

It  appears,  therefore,  that  unless  the  agent's  authority  is 
coupled  with  an  interest,  the  principal  has  the  j^owe?*  to  revoke 
it  at  any  time,  and  with  or  without  good  cause.  It  docs  not 
always  follow,  however,  that  he  has  the  right  to  revoke  with- 
out incurring  liability  for  breach  of  contract.  Where  there  is 
an  agreement,  express  or  implied,  that  the  relation  shall  en- 
dure for  a  definite  time,  the  principal  cannot  revoke  without 
subjecting  himself  to  liability  for  the  damages  resulting  to  the 
agcnt.2  Of  course,  this  rule  docs  not  apply  in  case  the  agent 
has  broken  an  express  or  implied  condition  in  the  original 
contract.  For  instance,  every  contract  of  agency  contains  the 
implied  condition  that  the  agent  will  faithfully,  honestly,  and 
diligently  perform  his  duty,  and  if  he  fails  so  to  do,  the  prin- 
cipal may  revoke  his  authority  without  liability.^  Unless 
guilty  of  gross  and  wilful  misconduct,  the  agent  is  entitled, 
upon  revocation,  to  reasonable  remuneration  for  his  past  ser- 
vices and  expenditures,  and,  if  nothing  further  remains  to  be 
done,  to  full  remuneration.* 

§  68.     Revocation,  effect  of,  as  to  third  persons. 

It  has  already  been  seen  that  the  revocation  of  an  agent's 
authority  is  effectual  as  to  all  persons  who  have  notice  that  it 
lias  been  made,  the  character  of  the  notice  depending  upon 
circumstances.  If  sufficient  notice  has  not  been  given,  and 
the  third  person  has  no  knowledge  of  the  revocation,  he  may 
presume  that  the  agency  still  exists,  and  his  subsequent  deal- 
ings with  the  agent  are  binding  and  enforceable  against  the  prin- 
cipal.s  In  such  case  the  jjrincipal  is  estopped  to  deny  the  agency. 

^  A  nte,  §  50  et  seq. 

2  Lewis  V.  Atlas,  &c.  Ins.  Co  ,  61  Mo.  534;  Standard  Oil  Co.  v.  Gil- 
bert, 84  Ga.  7U. 

3  Dieringer  v.  Meyer,  42  Wis.  311 ;   pnxt,  §  87. 

■*  Sumner  v.  Reicheniker,  9  Kansas,  320;  post,  §  79. 
5  Anon.  V    Harrison,  12  :Mod.  34(5;    Truenian  v.  Loder,  11  A.  &  E. 
589:  Clafliu  v.  Lenheini,  66  N.  Y,  301 ;   Fellows  v.  Hartford,  &c.  Co.,  38 

6 


82  TKK.MINATION    OF   AGENCY 

§  69.     Renunciation. 

The  agent,  like  the  principal,  may  terminate  the  relation  at 
will.  And  so  also,  his  renunciation,  if  not  express,  may  be 
implied  from  the  circumstances.  Thus,  if  the  agent  abandons 
his  work,  the  principal  is  justified  in  regarding  his  authority 
as  renounced.^ 

The  renunciation  becomes  operative,  as  between  ])rincipal 
and  agent,  when  knowledge  of  it  actually  reaches  the  princi- 
pal. And  the  principal,  as  in  the  case  of  his  own  revocation, 
must  notify  third  persons  in  order  to  protect  himself  from  lia- 
bility for  the  subsequent  fraudulent  dealings  of  the  agent.^ 

If  tlie  agency  is  to  endure  for  an  indefinite  period,  or  is  an 
agency  at  will,  the  agent  has  not  only  the  power  but  the  ri<jht 
to  renounce  at  any  time.^  But  in  case  there  is  an  express  or 
implied  agreement  that  the  agency  is  to  endure  for  a  definite 
period,  a  renunciation  is  a  breach  of  contract  and  subjects  the 
agent  to  liability  for  the  damages  resulting  to  the  principal.^ 
There  is  an  exception  to  this  rule,  of  course,  when  the  prin- 
cipal, by  his  own  breach,  justifies  the  renunciation.  If  an 
agent  renounces  the  employment  he  cannot  generally  recover 
compensation  for  services  rendered,  but  some  jurisdictions 
allow  a  recovery  on  quantum  meruit} 

3.     By  Operation  of  Law. 

§  70.     Change  affecting  subject-matter. 

Contracts  may  be  discharged  without  the  consent  of  the 
parties,  or  irrespective  of  their  consent.  Such  are  the  cases 
where  the  law  creates  a  discharge  on  grounds  of  public  policy, 
convenience,  or  necessity.  Discharge  by  operation  of  law  is 
a  topic  of  the  general  law  of  contract,  and  need  not  be  spe- 
cially treated  here.^     So  far  as  contracts  of  personal  service 

Cunn.  197;  Tier  v.  Lampson,  35  Vt.  179;  Lamothe  i'.  St.  Louis,  &c.  Co., 
17  iMo.  204. 

1  Stoddart  v.  Key,  62  How.  Pr.  (N.  Y.)  137. 

2  Capen  v.  Pac.  &c.  Ins.  Co.,  1  Dutcher  (N.  J.  L.),  07. 
8  Banow.s  v.  Cushway,  37  Mich.  181. 

*  Post  §81. 

6  Iluft'cut's  Anson  on  Cont.  pp.  390-399;  Leake  on  Cont.  (3d  ed.) 
590  el  se(^. 


BY   OPERATION   OF   LAW.  83 

arc  concerned  the  subject  involves,  (1)  a  change  in  the  law 
itself,  (2)  a  change  affecting  the  subject-matter  or  circum- 
stances of  the  contract,  (3)  a  change  affecting  the  parties  to 
the  contract.  These  changes  are  generally  in  the  nature  of 
what  is  termed  a  subsequent  impossibility. 

(1)  A  change  in  the  law  itself  which  renders  the  continu- 
ance of  the  contract  impossible,  because  illegal,  would  operate 
to  discharge  the  contract.^ 

(2)  A  change  affecting  the  subject-matter  or  circumstances 
of  the  contract  may  operate  to  discharge  the  contract  if  the  con- 
tract was  made  in  contemplation  of  the  continued  existence  of 
the  subject-matter  or  circumstances  as  it  or  they  were  at  the 
time  of  the  formation  of  the  contract.  Thus  if  the  agency  be 
created  for  the  sale  of  a  specific  article  and  the  article  should 
perish,  without  fault,  the  agency  would  be  terminated.^  So  if 
the  agency  contemplated  the  continued  existence  of  a  particu- 
lar state  of  things,  and,  without  fault,  this  condition  should 
cease  to  exist,  the  agency  would  be  terminated.^  But  "  the 
parties  must  have  contemplated  the  continuing  of  that  state 
of  things  as  the  foundation  of  what  was  to  be  done ; "  other- 
wise a  change  in  conditions,  however  seriously  it  may  inter- 
rupt the  agency,  will  not  discharge  the  contract.*  Whether 
the  danger  arising  from  the  prevalence  of  a  contagious  disease 
at  the  place  where  the  service  is  to  be  rendered  will  discharge 
the  contract,  is  a  disputed  question.^ 

(3)  A  change  affecting  the  parties  to  the  contract  may  be 
caused  by  death,  insanity,  illness,  marriage,  constraint  of  law, 
bankruptcy,  and  war.  These  are  treated  in  the  succeeding 
section. 


1  Cordes  v.  Miller,  39  Mich.  581. 

2  Dexter  v.  Norton,  47  N.  Y.  G2. 

8  Stewart  v.  Stone,  127  N.  Y.  500. 

*  Turner  i'.  Goldsmith,  1891,  1  Q.  B.  514,  where  the  destruction  of  the 
principal's  manufactory  was  held  not  to  discharge  an  agency  for  the  sale 
of  the  goods  manufactured;  so  also  Madden  v.  Jacobs,  52  La.  Ann. 
2107. 

5  Lakeman  v.  Pollard,  43  Me.  463;  Dewey  v.  Union  School  Dist.,  43 
Mich.  480. 


84  te[;mixation  of  agency 

§  71.     Change  in  condition  of  parties. 

(1)  Death.  The  death  of  either  i>arty  to  the  contract  ter- 
minates tlie  agency.  It  is  no  longer  binding  on  the  survivor 
nor  on  tlic  estate  of  the  deceased. ^  The  death  of  the  principal 
revokes  the  anthority  of  the  agent,  and  any  contracts  made 
uith  him  afterwards  are  a  millity,  even  though  no  notice  of 
the  revocation  of  authority  is  given.^  The  death  of  one  of 
two  joint  principals  has  the  like  effect.^  l>ut  if  the  agent's 
authority  be  coupled  with  an  interest,  the  death  of  the  i>rinci- 
pal  does  not  revoke  the  authority.*  So  also,  the  death  of  the 
agent  terminates  his  authority,  and  it  cannot  ))e  exercised  by 
his  administrator.^ 

(2)  Inmnity.  The  after-occurring  insanity  of  the  principal 
or  agent,  like  his  death,  terminates  the  agency.^  And  if  his 
insanity  has  been  judicially  declared,  the  decree  of  the  court 
will  be  regarded  as  notice,  and  the  revocation  will  operate 
upon  all  persons,  whether  or  not  they  have  actual  knowledge 
of  the  insanity.  But  if  the  princii)al  has  not  been  formally 
adjudged  insane,  persons  who,  in  ignorance  of  the  insanity, 
deal  with  the  agent,  are  protected.  This,  upon  the  theory 
that  while  both  principal  and  tliird  person  are  innocent  and 
free  from  blame,  the  principal,  by  conferring  the  original 
authority,  had  made  the  wrong  possible,  and  he  must  there- 
fore bear  the  loss."     In  accordance  with  the  general  rule,  if 

1  Lacy  )'.  Getraan,  HON.  Y.  100. 

2  Farmers',  &c.  Co.  v.  Wilson,  139  N.  Y.  284;  Long  v.  Thayer,  l.oO 
U.S.  520;  In  re  Succession  of  Lanaux,  46  La.  Ann.  10:56;  Harper  v. 
Little,  2  Me.  14;  Blades  v.  Free,  9  B.  &  C.  167.     Post,  §  200. 

^  McNaughton  v.  Moore,  1  Haywood  (N. C),  189;   Rowe  v.   Kand, 

111  Ind.  206 ;  Tasker  v.  Shepherd,  6  H.  &  X.  575. 

■*  limit  V.  Rousmanier.  8  Wheat.  (U.  S.)  174,  203;  Grapel  v.  Hodges, 

112  X.Y.  41 0;  jujsi,  §  72. 

^  Johnson  r.  Jolinson's  Adni'r,  Wright  (Ohio),  594. 

6  Davis  V.  Lane,  10  N.  H.  l.')();  Motley  v.  Head,  43  Vt.  633;  MatHiie- 
sen,  &c.  Co.  v  McMahon,  38  N.  .J.  L.  536  ;  Drew  v.  Xuun,  L.  R.  \  il.  B.  D. 
661. 

'  Ante,  §  16.  But  the  burden  is  upon  tlio  third  party  to  show  that  he 
■was  ignorant  of  the  principal's  insanity.  !Merritt  v.  Merritt,  43  W.  Y. 
App.  Div.  68. 


BY   OPERATION    OF   LAW.  85 

tlie  agent's  authority  is  coupled  with  an  interest,  the  princi- 
pal's insanity  does  not  terminate  the  agency.^ 

(3)  Illness.  The  illness  of  the  principal  would  have  no 
effect  uj)on  the  agency.  Ihit  the  illness  of  the  agent  which 
incapacitated  him  from  performing  the  duties  of  the  agency 
would  warrant  him  in  renouncing  the  contract.-  And  it  is 
immaterial  that  his  illness  is  due  to  his  own  fault,  since  an 
inquiry  as  to  the  cause  of  the  illness  is  treated  as  an  inquiry 
into  a  remote  cause.^  If,  however,  before  renunciation  or 
notice  of  the  termination  of  the  agency,  the  agent  should  act 
for  the  principal,  his  acts  would,  of  course,  be  binding. 

(4)  Marriage.  The  marriage  of  a  principal  does  not,  as  a 
general  rule,  operate  as  a  termination  of  the  agency.  It  may, 
liowever,  revoke  an  authority  the  exercise  of  which  would 
impair  rights  growing  out  of  the  marriage.  For  instance  it  is 
lield  that  a  power  of  attorney  to  sell  land,  the  home  of  a  single 
man,  is  revoked  by  his  marriage*  The  principal's  wife,  by 
the  marriage,  acquires  an  interest  in  the  land  which  can  only 
be  divested  by  her  joining  in  the  conveyance,  or  in  the  power 
to  convey.  Under  the  common  law,  a  woman  was  deprived 
by  marriage  of  all  control  over  her  property,  and  the  authority 
of  her  agent  was  consequently  revoked.^  But  under  the 
modern  statutes  giving  to  married  women  the  right  to  hold 
and  control  separate  property,  this  rule,  of  course,  does  not 
apply.  The  marriage  of  a  woman  who  is  under  contract  of 
service  does  not  of  itself  afford  ground  for  a  revocation  of  the 
contract  by  the  master.^  And,  as  we  have  seen,  married 
women  may  act  as  agents.' 

(5)  Constraint  of  Law.  Where  the  law  puts  a  constraint  on 
one  of  the  parties  which  renders  it  impossible  for  him  to  con- 
tinue the  relation,  the  agency  is  revoked.     Thus  the  arrest 

1  PoM,  §  72. 

2  Spalding  v.  Rosa,  71  N.  Y.  40 ;  Robinson  v.  Davison,  L.  R.  6  Ex. 
2G9. 

8  Hughes  V.  Wamsiitta  ^lills,  11  Allen  (Mass.),  201  (semble). 

*  Henderson  v.  Ford,  4G  Texas,  627. 

6  Wambole  v.  Foote,  2  Dak.  1. 

6  Edgecombe  v.  Buckhout,  146  N.  Y.  332.  ?  Ante,  §  23. 


86  TERMINATIOX    OF   AGENCY 

and  imprisonment  of  an  atront  terminates  tlie  agency,  and  it  is 
immaterial  that  the  arrest  is  due  to  the  fault  of  the  offender.^ 
So  if  a  corporation  be  dissolved  by  judicial  proceedings,  the 
agency  is  revoked.^  The  dissolution  of  a  partnership,  whether 
voluntary  or  involuntary,  terminates  an  agency  in  which  the 
firm  was  either  principal  or  agent.^ 

(G)  BanJcruptcij.  The  mere  insolvency  of  the  principal  has 
no  effect  upon  the  agency,  but  if  the  principal  becomes  legally 
bankrupt,  and  voluntarily  or  involuntarily  surrenders  the  con- 
trol of  his  property  and  affairs,  the  authority  of  the  agent, 
unless  coupled  with  an  interest,  is  regarded  as  terminated.* 
It  seems,  however,  that  even  after  bankruptcy,  the  agent  may 
act  for  his  principal  in  regard  to  all  matters  except  those 
touching  the  rights  and  property  of  which  he  is  divested  by 
the  bankruptcy.^  And  it  is  also  held  that  although  the  adju- 
dication of  the  court  relates  back  to  the  act  of  bankruptcy, 
persons  who,  subsequent  to  the  act  of  bankruptcy  but  prior 
to  the  adjudication,  deal  with  the  agent  in  good  faith,  will 
be  protected.^  The  bankruptcy  of  the  agent  revokes  his 
authority  to  deal  with  the  principal's  property  rights,  although 
he  might  still  perform  a  purely  formal  act.' 

(7)  War.  Although  there  are  several  cases  to  the  contrary, 
it  seems  to  be  the  law  in  America,  that  the  existence  of  war 
between  the  country  or  State  of  a  principal,  and  that  of  his 
agent,  terminates  the  agency.  This  is  in  accord  with  the 
general  rule  that  all  trading  or  commercial  intercourse  be- 
tween two  countries  at  war  is  prohibited.^     The  exception  is 

^  Hughes  V.  "Wamsutta  Mills,  11  Allen  (Mass.),  201;  Leopold  v. 
Salkev,  89  111.  412. 

2  People  V.  Globe  Ins.  Co.,  91  X.  Y.  174. 

8  Griggs  V.  Swift,  82  Ga.  392. 

*  Story  on  Agency,  §  482;  ]\Iinctt  v.  Forrester,  4  Taunt.  511;  Pear.son 
V.  Graham.  0  A.  &  E.  899;  Parker  v.  Smith,  IG  East,  382;  Ex  parte 
Snowluall,  L.  R.  7  Ch.  App.  548. 

6  Dixon  V.  Ewart,  Buck,  9 1 ;  3  Mer.  322. 

8  Ex  parte  Snowball,  L.  II.  7  Ch.  App.  543;  Elliott  v.  Turquand, 
L.  R.  7  App.  Cases,  79. 

■^  Audenried  v.  Betteley,  8   Allen   (iMass.),  302.      As  to  the  agent's 
right  to  compensation  after  bankruptcy,  see  post,  §  80. 
•      *  Kershaw  v.  Kelsey,  100  Mass.  5G1 ;    United  States  v.  Grossmayer, 
8  Wall.  (U.  S.)  72.     See  ante,  §  22. 


hY  IRUEVOCABLE   AGENCIES.  87 

recognized,  however,  that  debts  may  be  paid  to  the  agent  of 
an  alien  enemy,  wlien  such  agent  resides  in  tlie  same  State 
"with  the  debtor.  But  it  must  hr  with  the  mutual  assent  of 
princi{>al  and  agent,  and  it  must  not  be  done  with  the  view  of 
transmitting  the  funds  to  the  principal  during  the  continuance 
of  the  war.^ 

4.    Irrevocable  Agencies. 

§  72.     Doctrine  of  irrevocable  agencies. 

To  the  general  rule  that  an  authority  vested  in  an  agent 
may  be  revoked  by  the  principal,  and  that  it  is  revoked  by 
the  death,  lunacy,  or  bankruptcy  of  the  principal,  there  are 
some  exceptions,  and  these  exceptions  constitute  what  are 
known  as  irrevocable  agencies.  The  reason  for  holding  cer- 
tain powers  vested  in  an  agent  irrevocable,  is  that  a  revoca- 
tion would  cause  to  the  agent  a  loss  or  damage  other  than, 
and  different  from,  a  mere  loss  of  employment  or  profit.  Thus 
if,  for  a  valuable  consideration,  an  authority  is  vested  in  an 
agent  for  the  purpose  of  fortifying  a  security  held  by  him 
against  the  principal,  or  of  protecting  or  securing  an  interest 
of  his,  the  authority  is  irrevocable  because  its  revocation 
would  subject  the  agent  to  damage  by  the  loss  of  such  secu- 
rity, or  the  means  of  realizing  upon  it.^  So  also  if  the  agent 
is  employed  to  do  an  act  which  involves  him  in  personal 
liability  to  a  third  person,  and  he  has  incurred  such  liability, 
the  power  cannot  be  revoked,  because  its  revocation  would 
subject  the  agent  to  an  action  by  the  third  person.^  In  the 
first  case  the  agent  is  said  to  have  "  a  power  coupled  with  an 
interest."  In  the  second  case  he  may  be  said  to  have  "  a 
power  coupled  with  an  obligation."  There  are,  then,  two 
exceptions  to  the  general  rule  that  an  agency  is  revocable, 

^  Insurance  Co.  v,  Davis,  95  U.  S.  425;  N.  Y.  Life  Ins.  Co.  v.  Statham, 
93  U.  S.  24 ;  Ward  v.  Smith,  7  Wall.  (U.  S.)  447 ;  Howell  v.  Gordon,  40 
Ga.  302.     See  ante,  §  21. 

2  Walsh  i:  Whitcorab,  2  Esp.  565;  Gaussen  i'.  IVIoiton,  10  B.  &  C.  731 ; 
Raleigh  v.  Atkinson,  6  M.  &  W.  G70;  Smart  v.  Sandars,  5  C.  B.  895; 
Dickinson  v.  Bank,  129  Mass.  279 ;  Carter  r.  Slocomb,  122  X.  C.  475. 

8  Read  r.  Anderson,  13  Q.  B.  D.  779;  Tbacker  v.  Hardy,  4  Q.  B.  D. 
685 ;  Crowfoot  v.  Gurney,  9  Bing.  372 ;  Hess  v.  Ran,  95  N.  Y.  359. 


88  TERMINATION    OF    AGENCY 

namely,  (1)  where  the  aixent  has  ''  a  power  coupled  with  an 
interest,"  and  (2)  when  the  agent  has  "a  power  coupled  with 
an  obligation." 
V  (1)  A  "power  coupled  with  an  interest"  is  dil'licult  to 
define  accurately.  The  word  "interest"  must  not  l)e  taken 
in  a  broad  but  in  a  narrow  sense.  It  means  an  interest  in 
tlie  thing  itself  which  constitutes  the  subject-matter  of  the 
agency  as  distinguished  from  an  interest  in  tlie  execution  of 
the  power.  "  In  other  words,  the  power  nnist  be  engrafted 
on  an  estate  in  the  thing."  ^  There  must  be  first  an  interest 
or  title  in  the  thing  constituting  the  subject-matter  of  the 
agency  and  then,  coupled  with  this,  a  power  to  dispose  of  or 
otherwise  control  the  thing  for  the  purpose  of  protecting  the 
interest.  Thus,  if  a  factor  makes  advances  to  liis  principal 
in  consideration  of  authority  to  sell  goods  consigned  to  him 
and  reimburse  himself  for  the  advances,  the  authority  is  irre- 
vocable ;  but  if  he  is  authorized  to  sell  the  goods  and  pay 
himself  from  the  proceeds  a  sum  not  advanced  in  considera- 
tion of  the  power,  the  authority  is  revocable.^  If  one  have  an 
interest  in  lands  or  goods,  coupled  with  a  power  of  sale,  the 
power  is  irrevocable.^  But  if  one  be  authorized  to  sell  lands 
or  goods  in  which  he  has  no  interest  and  apply  the  proceeds 
to  a  debt  due  the  agent  from  the  principal,  the  power  is  revo- 
cable because  the  agent,  while  having  an  interest  in  the 
execution  of  the  power,  has  none  in  the  subject-matter  of  the 
agency.* 

The  American  rule  seems  to  be  that  an  interest  in  the  sub- 
ject-matter of  tlie  agency  by  way  of  security  or  indenmity, 
coupled  with  a  power  to  sell  or  otherwise  dispose  of  the 
property,  renders  the  power  irrevocable;^  but  an  interest  by 

^  Hunt  V.  Rousmaiiier,  8  Wheat.  (U.  S.)  174. 

2  Raleigh  v.  Atkinson,  6  IM.  &  W.  670;  Smart  v.  Sandars,  5  C.  B.  895; 
Taplin  V.  Florence,  10  C  B.  744. 

8  Roland  v.  Coleman,  76  Ga.  052;  Knapp  i'.  Alvord,  10  Paige  (X.  Y.), 
205. 

*  Hunt  V.  Rousinanier,  8  Wheat.  (U.  S.)  174;  Friuk  c.  Koe,  70  Cal. 
296;  Farmers',  &c.  Co.  r.  Wilson,  139  N.  Y.  284. 

6  Knapp  V.  Alvord,  10  Paige  (N.  Y.),  205. 


BY   lEREVOCABLE    AGENCIES.  89 

way  of  compensation  in  the  proceeds  of  such  sale  is  not  such 
an  interest  as  will  render  the  power  irrevocable.^ 

The  English  rale  is  somewhat  broader  and  is  to  the  effect 
that  where  an  agreement  is  entered  into  on  a  sufficient  con- 
sideration, whereby  an  authority  is  given  for  the  purpose  of 
securing  some  benefit  to  the  donee  of  the  authority  (as  in  the 
proceeds  by  way  of  payment  of  a  debt),  such  an  authority  is 
irrevocable.^  This  rule  does  not  positively  require  that  the 
agent  should  have  an  "  interest  in  the  subject-matter,"  in 
the  sense  in  which  that  term  is  employed  in  most  of  the 
American  cases,  but  is  satisfied  if  the  agent  has  an  interest  in 
the  execution  of  the  power,  provided  such  interest  rests  upon 
a  sufficient  consideration. 

A  leading  American  case  took  a  distinction  between  revo- 
cation by  the  voluntary  act  of  the  principal,  and  revocation  by 
death,  and,  while  arguing  that  where  the  agent  had  acquired 
upon  consideration  an  interest  in  the  execution  of  the  power, 
the  principal  could  not  have  revoked  such  power  during  his 
life,  held  that  the  power  was  revoked  by  the  principal's 
death.3  It  is  believed,  however,  that  such  a  distinction  is  not 
generally  recognized,  and  that  where  a  power  is  irrevocable 
by  the  voluntary  act  of  the  principal,  it  is  not  revoked  by  his 
bankruptcy,*  insanity,  or  death.^ 
Y  (2)  ^  power  coupled  with  an  obligation  means  a  power  in 
the  execution  of  which  an  agent  has  come  under  some  obliga- 
tion to  a  third  person.  Where  the  revocation  would  involve 
the  agent  in  liability  to  a  third  person,  the  principal  cannot 
revoke,  nor  will  the  law  revoke,  the  agency.  Thus  if  an 
agent  is  authorized  to  make  a  contract  for  the  principal  and 

^  Blackstone  v.  Buttermore,  53  Pa.  St.  2G6 ;  Chambers  v.  Seay,  73 
Ala.  372 ;  Stier  v.  Ins.  Co.,  58  Fed.  Rep.  843. 

2  Gaussen  i^.  Morton,  10  B.  &  C  731 ;  Clerk  v.  Laurie,  2  H.  &  N.  199 ; 
In  re  Hannan's,  &c.  Co.,  1896,  2  Ch.  643,  affirming  74  L.  T.  Rep.  n.  s.  550. 

3  Hunt  V.  Rousmanier,  8  "Wheat.  (U.  S.)  174.  See  also  ^Vatson  i-. 
King,  4  Camp.  272. 

*  Dickinson  v.  Bank,  129  Mass.  279;  Renshaw  i'.  Creditors,  40  La. 
Ann.  37. 

5  Knapp  V.  Alvord,  10  Paige  (X.  Y.),  205;  Hess  v.  Rau,  95  N.  Y. 
359;  Carter  v.  Slocomb,  122  N.  C.  475. 


90  TERMINATION   OF   AGENCY. 

the  agent  has  so  far  involved  himself  in  the  execution  of  the 
power  as  that  he  would  suffer  loss  or  damage  if  the  affair 
were  not  carried  through,  the  power  to  consummate  it  is  irre- 
vocable.^ So  also  if  the  agent  is  authorized  to  pay  money  on 
behalf  of  the  principal  to  a  third  person,  and  has  come  under 
a  personal  liability  to  such  third  person  for  the  sum  in  ques- 
tion, the  principal  cannot  revoke  the  authority .^  These  cases 
are  sometimes  treated  as  if  they  were  those  of  a  "  power 
coupled  with  an  interest,'"'^  but  they  are  distinguishable  from 
that  class  of  cases  which  really  have  a  more  dcliuitely  limited 
scope.* 

1  Iluffcut's  Alison  on  Cont.  pp.  431-432;  Read  v.  Anderson,  10  Q.  B. 
D.  100 ;  Hess  v.  Ran,  95  N.  Y.  359. 

-  Crowfoot  V.  Gurney,  9  Ring.  372;  Goodwin  r.  Bowden,  54  Me.  424. 
See  also  Kindig  v.  March,  15  Ind.  248.     Post,  §  205. 

8  Hess  V.  Ran,  siipj-a. 

*  Huffcut's  Anson  on  Cont.  p.  432. 


PART   II. 

LEGAL   EFFECT  OF   THE   RELATION  AS  BETWEEN 
PRINCIPAL   AND   AGENT. 

§  73.     Introduction. 

It  being  assumed  that  the  relation  of  principal  and  agent 
has  been  formed,  we  pass  to  a  consideration  of  the  legal  con- 
sequences of  the  relation  as  concerns  the  principal  and 
agent.  The  relation  when  founded  on  contract  imposes 
mutual  obligations.  Even  when  gratuitous  the  agency  if  acted 
upon  calls  for  care  and  prudence  on  the  part  of  the  agent. 
We  proceed  therefore  to  inquire  :  (1)  What  are  the  obliga- 
tions of  a  principal  toward  his  agent ;  and  (2)  What  are  the 
obligations  of  an  agent  toward  his  principal  ? 


92  riilNCII'AL   AND   AGENT. 


CHAPTER   YII. 

OBLIGATIONS    OF    PRINCIPAL    TO    AGENT. 

§  74.     Source  and  nature  of  obligations. 

Tl)c  obligations  of  each  \ydvty  are  fixed  cither  by  the  terms 
of  the  contract  agreed  to  by  them,  or  by  the  terms  annexed 
by  law  or  custom,  or  by  the  terms  reasonal>ly  inferred  from 
the  circumstances  of  the  case.  The  relation  being  largely  a 
fiduciary  one,  the  obligations  are  correspondingly  high,  as  will 
appear  hereafter. 

Turning  then  to  the  subject  of  the  obligations  of  the  prin- 
cipal, we  may  classify  them  as  follows :  — 

1.  The  duty  to  comjjensate  the  agent. 

2.  The  duty  to  reimburse  the  agent. 

3.  The  duty  to  indemnify  the  agent. 

§  75.     Compensation. 

An  express  agreement  as  to  compensation  will  fix  definitely 
the  right  and  amount  of  recovery  for  the  agent's  services. 
The  agreement  may  further  fix  the  manner  of  payment  or  the 
means  of  ascertaining  when  the  compensation  has  been  earned, 
or  it  may  fix  a  condition  upon  the  haj)j)ening  of  which  the 
compensation  sliall  be  deemed  to  be  earned.^  In  all  such 
cases  the  terms  fixed  by  the  parties  will  be  conclusive  of  tlie 
reciprocal  rights  and  obligations.^ 

In  the  absence  of  an  express  agreement  as  to  compensation, 
there  will  arise  an  implied  agreement  to  ])ay  whatever  the 
services  are  reasonably  worth,  under  all  circumstances  where 
a  reasonable  man  would  infer  that  the  services  were  not  in- 

1  Cutter  V.  rowell,  6  T.  R.  3-20. 

2  Wallace  v.  Floyd,  29  Pa.  St.  184;  Zerrahn  v.  Ditson,  117  Mass.  553; 
Green  v.  Mules,  30  L.  J.  C.  P.  343  ;  Bower  v.  Jones,  8  Biiig.  Go. 


OBLIGATIONS    OF   rRINCIPAL.  93 

tended  to  be  gratuitous.^  In  these  cases  the  principal  ques- 
tion is,  was  any  compensation  intended  ?  The  answer  must 
be  sought  in  the  circumstances  of  the  transaction.  If  they 
arc  sucli  as  to  lead  to  a  reasonable  inference  that  payment 
is  mutually  intended,  then  payment  may  be  enforced  ;  but  if 
they  are  such  as  to  lead  to  a  reasonable  inference  that  the 
services  were  intended  to  be  gratuitous,  then,  however  valu- 
able they  may  prove  to  be,  no  payment  for  them  can  be 
enforced  against  the  one  benefited.  In  the  application  of 
this  test  some  subsidiary  considerations  may  be  assumed  to 
be  settled.  Firat,  if  the  services  were  rendered  on  request 
there  is  a  presumption  that  compensation  was  intended,^ 
except  where  the  transaction  is  between  near  relatives.-^  In 
the  latter  case  there  must  be  not  only  the  express  request 
but  also  an  express  promise,  for  otherwise  the  reasonable 
inference,  arising  from  the  relation  of  the  parties,  is  that  the 
services  are  intended  to  be  gratuitous.*  So,  also,  the  pre- 
sumption arising  from  the  request  may  be  rebutted  by  the 
existence  of  other  attendant  circumstances,  as  where  the  ser- 
vices are  competitive,  or  are  rendered  on  the  chance  of  future 
employment,  or  compensation  is  at  the  will  of  the  principal.^ 
Second,  where  there  is  no  express  request,  the  circumstances 
of  the  transaction  may  raise  an  implied  request,  or  an  implied 
acceptance  of  an  offer,  and  therewith  an  implied  promise  to  pay.^ 
These  cases  should  be  sharply  distinguished  from  those  where 
the  services  are  rendered  at  the  request  of  an  employee  of  the 
principal,  and  the  question  is  whether  the  employee  is  an  agent 
by  necessity.'     Third,  where  there  is  neither  an  express  or  im- 

1  Bryant  v.  Flight,'5  M.  &  AV.  114;  Manson  r.  Baillie,  2  ]\Iacq.  H.  L. 
Cas.  80;  JNIcCrary  v.  Ruddick,  33  Iowa,  521. 

2  Weston  V.  Davis,  24  Me.  374;  Weeks  v.  Holmes,  12  Cush.  (^Nlass.) 
215;  Van  Annan  v.  Byington,  38  111.  442. 

3  Hertzog  v.  Hertzog,  20  Pa.  St.  465;  Hays  v.  McConnell,  42  Ind.  285; 
Scully  V.  Scully's  Extr.,  28  Iowa,  548. 

4  Ibid. 

6  Palmer  v.  Haverhill,  98  Mass.  487;  Scott  r.  Maier,  56  IMich.  554; 
Taylor  v.  Brewer,  1  M.  &  S.  2!)0. 

6  McCrary  v.  Ruddick,  33  Iowa,  521 ;  Shelton  v.  Johnson,  40  Iowa,  84; 
Garrey  v.  Stadler,  67  Wis.  512. 

■^  See  ante,  §  59. 


94  PRINCIPAL   AND   AGENT. 

plied  request,  nor  an  cxjjrcss  or  implied  promise,  the  services 
are  deemed  gratuitous  however  valuable  they  may  have  been.* 

§  76.     Compensation  :  remedies  of  agent. 

In  addition  to  the  general  remedies  open  to  all  creditors,  an 
agent  may  have  a  special  remedy  in  the  nature  of  a  lien  upon 
the  subject-matter  of  the  agency.  Liens  are  either  general  or 
particular.  A  general  lien  exists  where  one  has  the  right  to 
retain  possession  of  goods  or  chattels  as  security  for  a  general 
balance,  independent  of  the  transaction  in  which  possession 
was  obtained.  A  particular  lien  covers  only  goods  or  chat- 
tels in  respect  of  which  debts  or  obligations  were  incurred. 
Aside  from  special  classes  of  agents,  as  factors,  bankei's  and 
attorneys,  the  lien  of  an  agent  is  a  special  or  particular  one 
and  extends  only  to  the  amount  claimed  for  services  or 
expenditures  performed  or  incurred  in  behalf  of  the  very 
property  upon  which  the  lien  exists,^  unless  by  express  agree- 
ment or  by  a  course  of  dealing  a  general  lien  is  to  be  in- 
ferred.3  This  lien  extends  to  property  or  funds  which  are 
the  produce  or  fruit  of  the  agency  and  which  remain  in  the 
hands  of  the  agent."*  The  lien,  however,  is  a  possessory  one 
and  is  lost  by  parting  with  the  possession  of  the  property  or 
funds.^  In  general,  the  doctrine  here  follows  the  doctrine  of 
all  common  law  liens.^ 

General  liens,  that  is,  liens  for  a  general  balance  of  account, 
exist  in  favor  of  factors,"  bankers,^  and   attorneys.^      Other 

1  Chadwick  v.  Knox,  31  N.  H.  220 ;  Bartholomew  v.  Jackson,  20  Johns. 
(N.  Y.)  28.     Cf.  Hicks  v.  Burhans,  10  Johns.  (N.  Y.)  242. 

2  McKenzie  v.  Nevius,  22  Me.  138;  Muller  r.  Pondir,  55  N.  Y.  325. 
8  Bock  r.  Gorri.sen,  30  L.  J.  Ch.  39. 

4  IVIuller  V.  Pondir,  55  N.  Y.  325;  Nagle  v.  McFeeters,  97  N.  Y.  196; 
Yinton  r.  Baldwin,  95  Ind.  433. 

^  Tucker  v.  Taylor,  53  Ind.  93 ;  Collins  v.  Buck,  G3  Me.  459  ;  Levy  v. 
Barnard,  2  Moore,  34. 

«  See  Jones  on  Liens,  §§  1-20. 

1  Story  on  Agency,  §  376 ;  Martin  v.  Pope,  6  Ala.  532 ;  IMcGraft  v. 
Rugee,  60  Wis.  406 ;  Matthews  v.  Menedger,  2  McLean  (U.  S.  C.  C),  145; 
Baring  i-.  Corrie,  2  B.  &  A.  137. 

8  Jones  on  Liens,  §  241 ;  Mi.sa  v.  Carrie,  1  App.  Cas.  554. 

9  Bowling  Green  Savings  Bank  v.  Todd,  52  N.  Y.  489  ;  Ilurlbert  v. 
Brighaui,  56  Vt.  368;  In  re  Broomhead,  5  D.  &  L.  52. 


OBLIGATIONS   OF   PrvIXCIPAL.  95 

general  liens  are  sometimes  created  by  statute.     But  the  de- 
tails of  tliis  subject  are  foreign  to  the  purpose  of  this  work. 

Ordinarily  an  agent's  remedy  against  his  principal  is  in  an 
action  at  law.  Where,  however,  the  accounts  between  them 
are  too  long  and  complicated  to  be  conveniently  submitted  to 
a  jury,  the  agent  may  have  an  accounting  in  equity  in  the 
nature  of  equitable  assumpsit.^  This  must  not  be  confused 
with  the  principal's  right  to  an  account  against  the  agent 
based  upon  the  fiduciary  relation.^ 

§  77.     Compensation  for  unauthorized  act. 

If  the  service  was  unauthorized  but  is  subsequently  ratified 
and  the  benefits  accepted  by  the  principal,  the  agent  may, 
ordinarily,  recover  for  the  services  in  the  same  way  and  to 
the  same  extent  as  if  the  service  had  been  originally  author- 
ized.^ This  doctrine  must,  however,  be  clearly  defined.  In 
the  first  place  the  adoption  of  the  act  must  be  intended  as  a 
ratification  in  toto,  and  not  merely  as  an  attempt  on  the  part 
of  the  principal  to  avoid  further  loss,  and  in  the  next  place  it 
must  be  remembered  that  what  might  establish  ratification  as 
between  the  principal  and  the  third  party  will  not,  necessarily, 
establish  it  as  between  the  principal  and  the  agent.^  It  is 
further  necessary  to  distinguish  clearly  between  ratification 
and  a  subsequent  promise  to  pay  for  a  gratuitous  service  ;  in 
the  latter  case  there  is  no  consideration  for  the  promise  and 
the  agent  cannot  recover.^  With  these  cautions  the  doctrine 
may  be  accepted  in  broad  terms.^ 

§  78.     Compensation  :  conditions. 

The  compensation  may  be  made  to  depend  upon  the  per- 
formance of   certain   conditions.     If   so,  the  performance  of 

1  Harrington  v.  Churchward,  29  L.  J.  Ch.  521 ;  Smith  v.  Leveaux,  1  H. 
&  M.  123. 

2  Post,  §  91 ;  Padwick  i'.  Stanley,  9  Hare,  627. 

8  Gelatt  V.  Ridge,  117  Mo.  553;  Wilson  v.  Dame,  58  N.  H.  392;  Dela- 
field  V.  Smith,  101  Wis.  664;  Frixione  v.  Tagliaferro,  10  M.  P.  C.  C.  175; 
Keay  v.  Fenwick,  1  C.  P.  D.  745. 

*  Triggs  V.  Jones,  46  Minn.  277. 

6  Allen  V.  Bryson,  67  Iowa,  591. 

«  See  ante,  §§  48,  49. 


96  PRINCIPAL    AND   AGENT. 

the  condition  is  necessary  to  cstulilish  the  cUviin  to  compensa- 
tion.^ If,  however,  the  condition  he  perfoiined  the  agent  is 
entitled  to  his  compensation,  even  though  tlie  princii)al  refuse 
to  avail  himself  of  the  results  of  the  service.  This  last  propo- 
sition is  illustrated  hy  the  cases  where  commissions  are 
promised  the  agent  for  the  sale  of  the  principal's  proi)erty, 
or  for  the  securing  of  a  loan.  If  the  agent  finds  a  purchaser 
ready,  willing  and  able  to  purchase  on  the  terms  fixed  by  the 
principal,  he  is  entitled  to  his  commission  although  the  prin- 
cipal refuse  to  carry  out  the  sale  on  those  terms,  or  the  sale 
falls  through  from  other  causes.^  So,  if  the  agent  finds  one 
willing  to  loan  to  the  principal  on  the  terms  fixed  by  the 
latter,  the  agent  has  earned  his  commissi(m  although  the 
principal  refuse  to  accept  the  loan.^  In  such  cases  the  agent 
has  performed  the  condition  precedent,  and  the  right  to 
compensation  is  perfected. 

§  79.     Compensation:  revocation  of  agency  by  principal. 

When  the  principal  wrongfully  revokes  the  agency  in 
breach  of  a  contract,  the  agent  may  :  (1)  treat  the  contract 
as  still  in  existence  and  sue  for  the  stipulated  compensaticm 
as  it  falls  due  ;*  (2)  treat  the  express  contract  as  rescinded 
and  sue  in  quantum  meruit  for  the  value  of  services  performed 
as  upon  an  implied  contract ;  °  (3)  treat  the  contract  as 
broken  and  sue  in  damages  for  its  breach.*^ 

The  first  remedy  is  no  longer  open  in  most  jurisdictions 
since  it  has  generally  been  regarded  as  contrary  to  social 
economy  to  permit  the  agent  to  remain  idle  and  recover  as 
for  constructive  services.'     Accordingly  it  has  been  held  that 

1  Green  v.  Mules,  :]()  L.  J.  C.  P.  3i:i;  Cutter  v.  rowell.  0  T.  R.  320; 
Jones  V.  Adler,  31  Md.  440. 

2  Ilorford  v.  Wilson,  1  Taunt.  12:  Lockwood  v.  Levick,  S  C.  B.  n.  s. 
603;  Mo.ses  v.  Bierlinjr,  31  N.  Y.  462;  Love  v.  Miller,  .53  Tnd.  21)4. 

'^  Fisher  v.  Drewett,  48  L.  J.  Ex.  32;  Yinton  ?;.  Baldwin,  8S  Tnd.  104. 
<  Allen  V.  Colliery  Engineer's  Co.,  196  Pa.  St.  512;  Strauss  v.  iSIeer- 
tief,  64  Ala.  290;  contra,  Howard  v.  Daly,  61  K  Y.  362. 
6  Prickett  /;.  Badger,  1  C.  B.  n.  s.  290. 

«  Howard  r.  Daly,  61  N.  Y.  362  ;  Liddell  v.  Chidester,  84  Ala.  508. 
"  Howard  v.  Daly,  61  N.  Y.  362  and  cases  there  cited. 


OBLIGATIONS    OF    PKIXCII'AL.  97 

if,  after  revocation,  the  agent  sues  for  and  recovers  one  in- 
stalment of  salary,  the  judgment  in  that  action  is  a  bar  to  any 
further  action  on  the  contract.^  But  of  course  this  would 
not  be  so  in  jurisdictions  that  admit  this  form  of  remedy 
under  the  doctrine  of  a  continuing  contract  and  constructive 
service.^ 

The  second  form  of  remedy  proceeds  upon  the  theory  that 
the  original  express  contract  is  rescinded,  and  that  the  prin- 
cipal has  agreed  to  pay  what  the  services  are  reasonably 
worth.  In  such  a  case  the  agent  is  not  confined  in  his 
recovery  to  the  original  contract  price,  but  may  recover  the 
full  reasonable  value  of  his  services,  as  for  benefits  conferred.^ 

The  third  form  of  remedy  is  the  usual  and  most  effective 
one.  It  proceeds  upon  the  theory  that  the  principal  has 
committed  a  breach  of  the  contract  to  the  damage  of  the 
agent,  and  the  latter  is  allowed  to  recover  whatever  damages 
he  can  establish.  The  right  of  action  accrues  immediately 
upon  the  revocation,  even  if  this  be  before  the  time  for  per- 
formance has  arrived.^  If  the  action  is  begun  before  the 
time  for  performance  has  arrived,  the  damages  hvq  prima  facie 
the  entire  stipulated  compensation  for  the  term  of  the  hir- 
ing ;  ^  if  the  action  is  begun  after  the  agent  has  entered  upon 
the  employment,  the  damages  are  the  salary  already  earned, 
and  jjrima  facie  iho.  stipulated  compensation  for  the  unexpired 
term.*^  To  reduce  the  prima  facie  damages  in  either  of  the 
above  cases,  the  principal  would  have  the  burden  of  showing 
the    probability  of   the    agent's  finding    similar   employment 

1  Alie  V.  Nadeau,  93  Me.  282. 

2  Allen  V.  Colliery  Engineer's  Co.,  196  Pa.  St.  512. 

3  Keener  on  Quasi-Contracts,  p.  300;  Derby  v.  Johnson,  21  Vt.  17. 

4  Hochster  v.  De  la  Tour,  2  E.  &  B.  678;  IToward  v.  Daly,  61  X.  Y. 
362;  Diigan  v.  Anderson,  36  iMd.  567;  Roehm  v.  Horst,  178  U.  S.  1. 
Contra,  Stanford  v.  IVIcGill,  6  N.  Dak.  536. 

6  Ibid. 

6  Cutter  V.  Gillette,  163  Mass.  95;  Richardson  v.  Eagle  Machine 
"Works,  78  Ind.  422 ;  James  v.  Allen  County,  41  Ohio  St.  226.  The 
theoi'y  that  the  agent  can  recover  dama^ies  only  down  to  the  time  of  the 
trial  has  some  support  (Gordon  v.  Brew>ter,  7  Wis.  353;  Sumner  v.  Con- 
haim,  54  N.  Y.  Supp.  146),  but  is  contrary  to  the  weight  of  authority. 


98  PRINCIPAL    AND    AGENT. 

(Jui'ing  the  unexpired  term,^  and  the  proof  must  be  weighty 
enough  to  convince  the  jury  of  such  reasonable  probability. 
If  the  action  is  not  brought  until  after  the  expiration  of  the 
prescribed  term,  the  measure  of  damages  is  i^r una  facie  the 
unearned  stipulated  compensation,  but  the  principal  may 
show  in  mitigation  of  damages  what  the  agent  has  earned 
during  that  time,  or  what  he  might  have  earned  had  he 
acted  prudently. 2  The  right  of  the  principal  to  diminish  the 
damages  by  showing  what  the  agent  might  earn  proceeds  on 
the  general  doctrine  of  the  hiw  that  upon  a  breach  of  con- 
tract it  is  the  duty  of  the  injured  party  to  act  prudently  and 
diligently  to  prevent  loss  to  himself.  The  application  in  the 
case  of  agency  involves  the  question  as  to  the  ditty  of  the 
agent  to  seek  other  employment.  He  is  bound  to  exercise 
reasonable  care  to  that  end,  but  he  is  not  bound  to  accept  a 
different  employment,^  nor  in  a  different  locality,*  nor  with 
an  employer  against  whom  reasonable  objections  would  lie.° 

If  the  revocation  of  the  agency  be  not  a  breach  of  the 
contract,  as  where  the  agency  is  at  the  will  of  the  principal,^ 
or  is  revoked  because  of  a  breach  by  the  agent  himself,'  no 
damages  can  be  recovered,  but  only  compensation  for  services 
actually  rendered.  If,  however,  the  agent  is  guilty  of  such 
gross  misconduct  or  negligence  that  tlie  service  he  has  ren- 
dered is  of  no  value  to  his  principal,  he  is  not  entitled  to 
compensation.^ 

1  Haniilton  v.  Love,  152  Ind.  Oil;  Howard  r.  Daly,  61  N.  Y.  302; 
Sutherland  v.  Wyer,  67  Me.  64;  Cutter  v.  Gillette,  163  Mass.  95;  Hand 
V.  Clearfield  Coal  Co.,  143  Pa.  St.  408. 

2  Howard  v.  Daly,  61  N.  Y.  362;  Leatherberry  v.  Odell,  7  Fed.  Rep. 
641  ;  Horn  v.  Western  Land  Ass'n,  22  ]\Iinn.  233. 

3  Costigan  r.  Mohawk,  &c.  Rd.  Co.,  2  Denio  (X.  Y.),  009  ;  Wolf  v. 
Studebaker,  05  Pa.  St.  459. 

*  Costigan  i'.  Mohawk,  &c.  Rd.  Co.,  2  Denio  (N.  Y.),  009;  Strauss  v. 
Meertief,  64  Ala.  299;  Harrington  v.  Gies,  45  Mich.  374. 

6  Strauss  v.  Meertief,  04  Ala.  299. 

6  United  States  v.  Jarvis,  Daveis  (U.  S.  C.  C),  274. 

^  Lawrence  v.  Gullifer,  38  Me.  532;  Massey  v.  Taylor,  5  Cold.  (Tcnn.) 
417. 

8  Dalton  V.  Lvin,  4  C.  &  P.  289;  Bracey  v.  Carter,  12  Ad.  &  E.  373; 
Sumuer  v.  Reicheuiker,  9  Kans.  320. 


OBLIGATIONS   OF   PiaNCIPAL,  99 

If  there  be  no  contract,  or  none  for  a  definite  time  or  a 
definite  service,  the  revocation  by  the  principal  gives  the 
agent  no  remedy.^  Whetlicr  there  has  been  an  engagement 
for  a  definite  time  or  for  definite  services  so  that  no  irreme- 
diable revocation  can  occur  is  a  question  of  construction  to  be 
settled  by  the  terms  of  the  contract  or  by  custom  and  usage.^ 

§  80.  Compensation:  revocation  of  agency  by  law. 
The  circumstances  which  will  revoke  an  agency  by  opera- 
tion of  law  have  already  been  pointed  out.=^  There  may  be 
some  incapacity  on  the  part  of  the  principal  or  some  incapac- 
ity on  part  of  the  agent.  In  either  case  the  impossibility  in 
question  discharges  the  contract  as  to  both  parties,  but  does 
not  discharge  the  liability  of  the  principal  for  services  already 
rendered.  In  case  of  death,  insanity,  illness,  imprisonment, 
or  other  incapacity  or  coercion  of  the  agent,  he  or  his  re- 
presentative may  recover  in  quasi-contract  for  benefits 
already  conferred,*  unless  he  has  expressly  stipulated  that 
he  shall  not  be  entitled  to  compensation  under  such  cir- 
cumstances,^ or  unless  he  knows  at  the  time  he  makes  the 
contract  that  it  will  be  impossible  for  him  to  perform  it.*^  In 
such  case,  however,  the  cost  of  completing  an  entire  contract 
may  be  considered  in  reduction  of  the  claim  for  benefits 
conferred."  Even  where  the  illness  or  imprisonment  is  caused 
by  the  fault  of  the  plaintiff  he  may  still  recover,  as  the  illness 
or  imprisonment,  and  not  the  wrongful  act  of  the  agent,  is 
regarded  as  the  proximate  cause  of  the  breach.^ 

1  Simpson  c.  Lamb,  17  C  B.  603;  Burton  r.  Great  N".  Ry.,  9  Exch. 
507;  In  re  London,  &c.  Bk.,  L.  R.  9  £q.  149 ;  Rhodes  v.  Forwood,  1  App. 
Cas.  256. 

2  Queen  v.  Parr,  39  L.  J.  Ch.  73;  Lewis  v.  Lis.  Co.,  61  :Mo.  534. 

3  Ante,  §§  70-71. 

4  Wolfe  V.  Howes,  20  N.  Y.  197;  ILighes  v.  Wamsutta  Mills,  11  Allen 
(Mass.),  201 ;  Green  i-.  Gilbert,  21  Wis.  401 ;  Walsh  v.  Fisher,  102  Wis. 
172. 

6  Cutter  V.  Powell,  6  T    R.  320. 

^  Jennings  v.  Lyons,  39  Wis.  553. 

T  Ricks  V.  Yates,  5  Ind.  115;  Wolfe  r.  Howes,  20  X.  Y.  197. 

®  Hughes  V.  Wamsutta  Mills,  supra. 


100  I'UINCIPAL   AND    AGENT. 

Bankruptcy  of  the  ])rincipalj  however,  does  not  discharge 
the  estate  from  liability  for  damages,  though  it  revokes  the 
authority  of  the  agent.^  But  in  case  of  revocation  in  con- 
sequence of  the  death  of  the  principal,  no  damages  may  be 
recovered  but  only  compensation  earned. - 

§  81.     Compeusatiou:  renunciation  of  agency  by  agent. 

Where  the  agent  renounces  the  agency  in  breach  of  the 
contract,  it  is  generally  held  that  he  can  recover  nothing  for 
the  services  already  performed.  It  is  due  to  his  own  fault 
that  the  contract  is  not  completed,  and  most  of  the  courts 
refuse  to  depart  in  his  behalf  from  the  severe  rule  of  the  law, 
which  forbids  a  man  to  profit  from  his  own  wrong.^  But  a 
few  jurisdictions  have  been  led  from  considerations  of  the 
liardships  of  the  case  to  permit  a  recovery  in  qaantum  meruit 
for  the  services  actually  performed,  so  far  as  tlie  value  of 
such  services  exceeds  the  damage  resulting  from  the  breach.* 
The  two  classes  of  cases  are  irreconcilable,  and  it  is  neces- 
sary to  know  what  is  held  in  each  jurisdiction  where  the 
question  may  arise. 

The  above  applies  to  the  cases  of  indivisible  contracts,  or 
to  one  partly  performed  division  of  a  divisible  contract. 

But  how  of  a  divisible  contract  in  which  one  or  more  parts 
have  been  fully  performed  ?  If  the  agreement  is  that  the 
agent  shall  work  a  year  at  a  given  price  per  month,  or  at  a 
given  commission  on  actual  sales,  payable  as  the  work  or 
sales  progress,  then  the  agent  upon  abandoning  the  contract 
would  be  able  to  maintain  an  action  for  the  full  months  he 

1  Vanuxem  v.  Bostwick,  10  W.  N.  C.  (Pa.)  74;  s.  c.  7  Atl.  Rep.  598. 

2  Yerrington  v.  Greene,  7  R.  I.  589. 

»  Stark  V.  Parker,  2  Pick.  (Mass.)  2G7 ;  :\ril]er  i'.  Goddard,  34  Me. 
102;  Hutchinson  v.  Wetmoro.  2  Cal.  310;  Ripley  v.  Chipman,  13  Yt.  268; 
Heiison  V.  Hampton,  32  Mo.  408;  Martin  v.  Schoenbercrer,  8  W.  &  S. 
(Pa.)  307;  Diefenback  v.  Stark,  56  Wis.  102;  Timberlake  v.  Thayer,  71 
Mi.ss.  279. 

*  Britten  V.  Turner,  6  X.  H.  481;  IMcClay  v.  Hedsrp.  18  Towa,  66; 
Downey  v.  Bnrke,  23  ^NIo.  228  (bnt  see  Henson  v.  Hampton,  unprn) ; 
Duncan  v.  Baker,  21  Kans.  90:  Parcell  v.  McComber,  11  Xeb.  209;  Coe 
V.  Smith,  4  Ind.  79;  Allen  v.  McKibbin,  5  Mich.  449. 


OBLIGATIONS   OF   PRINCIPAL.  101 

actually  served,  or  the  commissions  actually  earned,  subject 
to  a  counter-claim  for  damages  for  the  non-performance  of 
the  entire  contract.  This  proceeds  upon  the  theory  that  in 
effect  there  are  twelve  contracts  in  one,  and  that  the  breach 
of  (say)  the  fifth  is  no  bar  to  an  action  for  the  full  pei'furm- 
ance  of  the  first,  second,  third,  and  fourth.  But  the  fifth,  and 
the  succeeding  ones,  are  abandoned,  and  the  defendant  is 
entitled  to  damages  for  their  breach.  The  most  serious 
difficulty  in  these  cases  is  to  determine  whether  a  contract  is 
in  fact  divisible  or  indivisible.^  This  is  really  a  question  of 
construction  depending  upon  the  ascertainment  of  the  intent 
of  the  parties.  The  general  tendency  seems  to  be  to  hold 
contracts  of  service  entire  rather  than  severable,  although 
payment  may  be  stipulated  for  by  instalments.^ 

If  an  infant  renounce  his  employment,  he  may  nevertheless 
recover  tlie  value  of  his  services  without  abatement  for  dam- 
ages for  breach,  since  an  infant  may  always  rightfully  avoid 
such  a  contract.^  But  remaining  in  the  employment  after 
reaching  majority  ratifies  the  contract,  and  a  subsequent 
breach  is  within  the  general  rule.* 

§82.     Compensation:    agent   acting   for   both   parties. 

Where  an  agent  acts  for  both  parties,  his  right  to  compen- 
sation from  either  depends  upon  the  knowledge  or  want  of 
knowledge  by  the  principal  that  his  agent  was  acting  for  the 
other  party.  If  therefore  A  acts  as  agent  for  both  X  and  Y 
in  a  transaction  between  the  two,  A  may  recover  from  both 
if  each  knew  that  A  was  acting  for  the  other  also ;  ^  but  A 

1  On  this  see  Huffcnt's  Anson  on  Cent.  pp.  363-369 ;  Norrington  v. 
AVright,  115  U.  S.  188;  Cahen  v.  Piatt,  69  N.  Y.  348;  Gerli  v.  Poidebard 
Silk^Mfg.  Co.,  57  N.  J.  L.  432. 

2  Diefenback  v.  Stark,  56  Wis.  462 ;  Wilson  v.  Board  of  Education,  63 
INIo.  137;  Davis  v.  Maxwell,  12  Mete.  (:\Iass.)  286;  Widrig  v.  Taggart,  51 
Mich.  103. 

3  Judkins  v.  Walker,  17  Me.  38;  Moses  v.  Stevens,  2  Pick.  (^lass.) 
332;  Wheatly  v.  Miscal,  5  Ind.  142;  Lufkin  v.  Mayall,  25  N.  H.  82. 

*  Forsyth  t?.  Hastings,  27  Vt.  646. 

5  Bell  V.  McConnell,  37  Oh.  St.  396;  Alexander  v.  University,  57  Ind. 
466;  Adams  ISlining  Co.  v.  Senter,  26  Mich.  73. 


102  PKINCir-VL   AND    AGENT. 

cannot  recover  from  either  if  neither  knew  of  the  double 
agency  ;i  and  if  the  agent  has  been  paid  in  ignorance  of  this 
f^ct  tiie  monev  niav  be  recovered  back  by  the  principal^  But 
how  if  X  knew  A  was  also  acting  for  Y,  but  Y  did  not  know 
A  was  acting  for  X  ?  Clearly  A  cannot  recover  from  Y. 
Can  he  recover  from  X  ?  The  non-liability  of  the  second 
employer  having  knowledge  of  the  first  employment  has  been 
maintained.^ 

If,  however,  the  province  of  the  agent  is  merely  to  bring 
the  parties  together,  and  not  to  advise  as  to  the  terms  of  their 
contract,  he  may  recover  from  both  parties  if  he  act  as  the 
ao-ent  of  both,  since  there  is  nothing  inconsistent  with  a  double 
ao-ency  in  such  a  case.*  And  if,  in  accordance  with  the  rules 
of  a  stock  exchange,  a  broker  who  has  orders  from  one  cus- 
tomer to  jmrchase,  and  from  another  to  sell,  a  certain  stock, 
procures  another  member  of  the  exchange  to  act  for  one  of 
the  parties,  the  transaction  will  be  upheld.^  So  also  if  the 
agent's  duties  to  one  princii)al  have  been  fully  discharged,  he 
may  then  act  for  the  other  party  to  the  contract.*^  If  two 
agents  agree  that  they  will  share  the  commissions  received 
on  an  exchange  of  their  principals'  property,  the  agreement  is 
illegal  as  it  contemplates  a  fraud  on  the  principals.^ 

§83.     Compensation:    illegal   services. 

Where  tlie  services  of  the  agent  have  been  rendered  in  an 
unlawful  undertaking  to  which  he  is  i)rivy,  he  can  recover  no 
compensation.  This  applies  to  lobbying  contracts,^  contracts 
for  improperly  influencing  executive  ollicers,'*  marriage  broker- 

1  Salomons  v.  Pender,  .3  H.  &  C.  639;  Scribner  r.  Collar,  40  Mich.  375; 
Rice  V.  Wood.  113  Mass.  133;  Lynch  v.  Fallon,  11  11.  I.  311  ;  McDonald 
V.  Maltz,  94  Mich.  172. 

2  Caniiell  i.-.  .Smith,  142  Pa.  St.  2.5. 

»  See  Bell  r.  McConnell,  37  Oh.  St.  390  and  cases  cited. 

*  Montross  v.  Eddy,  94  Mich.  100. 

6  Terry  )■.  Birmingham  N.  Bk.,  99  Ala.  5G6. 

«  Short  V.  Millard,  G8  111.  292. 

'  Levy  I'.  Spencer,  IS  Colo.  5-32. 

8  Trist  V.  Ciiild,  21  Wall.  (U.  S.)  441. 

9  Tool  Co.  r.  Norris,  2  Wall.  (U.  S.)  45.  Cf.  Lyon  v.  Mitchell,  36  N. 
Y.  235. 


OBLIGATIONS    OF    PRINCIPAL.  103 

age  contracts,^  contracts  of  brokers  for  dealing  in  betting 
"futures,"^  and  thelike.^  Where  a  statute  or  ordinance  pro- 
vides that  any  person  acting  as  real  estate  broker  without  a 
license  shall  be  subject  to  a  penalty,  a  broker  acting  without 
a  license  cannot  recover  his  connnissions.^  Where  the  statute 
forbids  an  attorney  to  be  present  at  the  taking  of  depositions 
upon  interrogatories  unless  hoth  sides  arc  represented,  he  can- 
not recover  compensation  for  such  services  in  violation  of  the 
statute.^  At  common  law  an  agreement  of  an  attorney  to 
carry  on  a  suit  and  look  to  the  proceeds  of  the  suit  alone  for 
his  compensation  is  champertous  and  void.*^  But  this  rule  has 
been  much  modified  in  the  modern  law,  and  such  agreements 
are  now  generally  upheld  in  the  United  States.'^ 

§  84.     Reimbursement. 

An  agent  is  entitled  to  be  reimbursed  for  all  sums  which  he 
has  paid  out,  or  become  individually  and  solely  liable  for,  in 
the  due  course  of  tlie  agency  and  for  the  principal's  benefit.** 
The  expenses  or  outlays  must  have  been  reasonably  necessary 
in  due  course,  and  not  unreasonable  in  amount,  or  occasioned 
by  the  default  or  negligence  of  the  agent  liimself.^  Thus  an 
attorney  who,  under  implied  authority,  has  indemnified  an 
officer  for  making  a  levy,  may  recover  from  the  client  the  loss 
suffered  in  consequence  of  such  indemnity. ^^     If  the  contract 

1  Duval  V.  Welhiian,  124  N.  Y.  156. 

2  Irwin  V.  Williar,  110  U.  S.  499. 

3  Gihbs  V.  Baltimore,  &c.  Co  ,  130  U.  S.  396;  Bixby  v.  Moor,  51  N.  H. 
402:  Josephs  v.  Pebrer,  3  B.  &  C.  639;  Allkins  v.  Jupe,  2  C.  P.  D.  375. 

^  Cope  V.  Rowlands,  2  M.  &  W.  149 ;  Palk  v.  Force,  12  Q.  B.  666  ; 
Buckley  v.  Humason,  50  Minn.  19.5. 

^  Comfort  V.  Graham,  87  Iowa,  295. 

6  Ackert  r.  Barker,  131  Mass.  436 ;  BJaisdell  v.  Ahern,  144  Mass.  393. 

■  Huffcut's  Anson  on  Cont.  pp.  246,  247  ;  Reece  v.  Kyle,  49  Oh.  St. 
475;  Stanton  c.  Embrey,  93  U.  S.  548;  Fowler  v.  Callan,  102  N.  Y. 
395. 

8  Maitland  v.  Martin,  86  Pa.  St.  120;  Ruffner  v.  Hewitt,  7  W. 
Va.  585 ;  Warren  v.  Hewitt,  45  Ga.  501 ;  Cropper  v.  Cook,  L.  R.  3  C.  P. 
194. 

9  Lewis  V.  Samuel,  8  Q.  B.  685;  Duncan  v.  Hill,  L.  R.  8  Ex.  242; 
Godman  v.  Meixsel,  65  Ind.  32. 

1"  Clark  V.  Randal],  9  Wis.  135. 


104  PKINCITAL    AND    ACHNT. 

was  obviously,  or  to  the  knowledge  of  the  agent  for  an  illegal 
purpose,  he  can  have  no  reinibursement  or  inderauity  for  out- 
lays or  losses.^ 

§  85.     IndGmnity. 

The  agent  is  entitled  to  indemnity  against  the  consequences 
of  all  acts  performed  in  the  due  execution  of  his  authority 
which  arc  not  illegal  or  due  to  his  own  default.^  Even  as  to 
the  pcrlormancc  of  illegal  acts  he  may  claim  indemnity  if  he 
did  not  know  they  were  illegal  and  if  they  were  not  in  fact 
contrary  to  good  morals  or  general  public  jjolicy/'^  Thus  an 
auctioneer  who  innocently  sells  for  his  principal  goods  belong- 
ing to  a  third  person  is  entitled  to  indenniity  in  case  he  is 
obliged  to  respond  to  the  true  owner  for  conversion.*  So  an 
innkecj)er  who  detains  a  person  under  arrest  at  the  solicita- 
tion of  an  officer  may  recover  indemnity  if  he  is  obliged  to 
])av  damages  to  the  involuntary  guest  for  false  imprisonment.^ 
These  cases  escape  the  general  rule  that  there  is  no  indemnity 
or  contribution  between  joint  tort-feasors. 

If  the  transaction  is  illegal,  and  known  to  the  agent  to  be 
so,  or  if  though  not  known  to  the  agent  to  be  illegal,  it  is  a 
prohibited  act,  or  against  general  public  policy,  the  agent  is 
not  entitled  to  indemnity.  Thus  the  English  courts  held  prior 
to  the  Gaming  Act  of  1892,^'  that  an  agent  who  has  paid 
money  for  his  principal  or  incurred  liabilities  on  wagers  could 
recover  since  wagers  were  unenforceable  or  void,  and  not 
illegal."  Since  the  Gaming  Act  which  renders  wagers  illegal, 
the  holding  has  been  otherwise.^     In  this  country  wagering 

1  Ex  parte  Mather,  3  Ves.  37:5;  AUkins  v.  Jupo,  2  C.  P.  D.  375;  Mohr 
V.  Miesen,  47  Minn.  228. 

2  D'Arcy  v.  Lyle,  5  Binney  (Pa.),  4tl;  Saveland  v.  Green,  30  Wis. 
612;  Maitland  v.  Martin,  86  Pa.  St.  120. 

8  Bibb  V.  AUen,  149  U.  S.  481,  498;  Moore  v.  Appleton,  26  Ala.  633 ; 
34  Ala.  147. 

*  Adamson  v.  Jarvis,  4  Bing.  66 ;  Castle  v.  Noyes,  14  N.  Y.  329. 

^  Fletcher  v.  Ilarcot,  Mutton,  55. 

«  5.')  Vict.  c.  9. 

"  Thacker  v.  Hardy,  L.  R.  4  Q.  B.  D.  685 ;  Read  v.  Anderson,  L.  R. 
13  Q.  B.  D.  779. 

8  Tatam  v.  Reeve,  1893,  1  Q.  B.  44. 


OBLIGATIONS   OF   riUNCIPAL.  105 

contracts  are  generally  illegal,  and  not  merely  void,  and  dis- 
bursements and  liabilities  of  the  agent  are,  if  he  knows  the 
transaction  is  a  wager,  at  his  own  risk  since  he  become  parti- 
ceps  criminis}  If  the  transaction  is  one  which  the  agent 
ought  to  know  is  illegal,  he  cannot  recover  indemnity  although 
in  fact  he  believed  it  to  be  legal.^ 

If  the  loss  is  due  to  the  agent's  own  negligence  or  default 
he  cannot  recover  indemnity.^ 

§  86.     Non-assignability  of   obligations   or   rights. 

The  rule  of  law  is  strict  that  no  one  can  assign  his  obliga- 
tions.* Accordingly  the  principal  cannot  assign  to  a  third 
person  the  obligations  which  by  his  contract  he  undertakes 
toward  his  agent.  On  the  other  hand  the  general  rule  is  that 
rights  or  benefits  under  a  contract  may  be  assigned.^  Yet  an 
exception  occurs  in  the  case  of  agency.  A  principal  cannot 
assign  his  rights  to  the  services  of  the  agent,  since  the  agent 
is  not  bound  to  assume  a  fiduciary  relation  toward  the  assignee 
or  consent  to  be  governed  by  the  latter.^  It  follows  that  a 
principal  can  assign  neither  his  rights  nor  his  obligations 
under  the  contract  of  agency.  He  may  with  the  consent  of 
the  agent  or  servant  transfer  the  services  to  another,  so  as  to 
make  that  other  temporarily  the  principal  or  master.' 

1  Harvey  v.  IMerrill,  150  Mass.  1 ;  Molir  v.  Miesen,  47  Minn.  228. 

2  Coventry  v.  Barton,  17  Johns.  (N.  Y.)  142. 

3  Capp  V.  Tophara,  6  East,  392 ;   Duncan  v.  Hill,  L.  R.  8  Ex.  242 
See  Hartas  v.  Ribbons,  22  Q.  B.  D.  254. 

■1  Post,  §  94. 

5  Huffcut's  Anson  on  Cont.  Ft.  III.  Ch.  ii. 

6  lUd. ;  Hayes  r.  Willio,  4  Daly  (N.  Y.  C.  P.),  259. 

7  Post,  §  228  et  seq. 


106  riUNCIPAL   AND   AGENT. 


CHAPTER   VIIL 

OBLIGATIONS    OF   AGENT   TO    PRINCIPAL. 

1.     Ajenta  by    Contract. 

§  87.     Statement   of  obligations.  . 

An  agent  may  act  for  a  reward,  tliat  is,  for  a  valuable  consid- 
eration, or  he  may  act  gratuitously.  If  he  acts  fur  reward,  ho 
is  under  contract  and  must  perform  the  undertaking  or  pay 
damages.  If  he  enters  into  an  undertaking  gratuitously,  he  is 
not  bound  to  perform.^  We  deal  first  with  the  obligations  of 
agents  who  undertake  to  act  for  a  valuable  consideration. 
The  obligations  of  the  agent  to  the  principal  are  in  the  main 
,  as  follows  :  — 

^>ut^a-«-        1.     The  duty  to  obey  the  instructions  of  the  principal. 
^yj^Ax<.<<-      2.     The  duty  to  exercise  the  skill,  judgment,  and  care  neces- 
sary to  the  ])rudent  discharge  of  the  agency. 
^io^>-         3.     The  duty   to  act  with   the  highest  good    faith  in   the 

management  of  the  principal's  interests. 
<-J^K.  :.,       4.     The  duty  to  account  fully  for  all  the  proceeds  and  profits 
of  the  agency. 
L^. -^      5.     The  duty  to  act  in  person,  except  where  autliorized  by 
v^  his  principal  or  by  custom  to  act  through  sub-agents. 

§  88.     (I.)     Obedience. 

Agency  is  a  means  of  expressing  the  will  of  the  principal. 
The  agent  contracts  that  he  will  serve  as  the  means  to  that 
end,  and  the  measure  of  his  obedience  is  his  conformity  to  the 
dominant  will.  So  long  as  the  agent  correctly  carries  out 
the  will  of  his  principal  he  is  protected,  but  if  he  fails  to  be 
directed  by  it,  and  loss  ensues,  he  becomes   liable   for   the 

1  Post,  §  97. 


OBLIGATIONS   OF   AGENT.  107 

deviation.^  It  is  no  answer  even  that  he  used  reasonable  care 
and  diligence  in  the  course  he  pursued  ;  he  pursues  it  at  his 
own  risk  since  it  is  contrary  to  his  instructions,  and  it  is  not 
for  him  to  judge  of  the  reasonableness  of  such  instructions.^ 
Thus  where  the  principal  directed  the  agent  to  return  a  draft 
at  once  if  it  was  not  paid,  but  the  agent  held  the  draft  in 
order  to  give  the  drawee  an  opportunity  to  communicate  with 
the  drawer,  and  loss  ensued,  the  agent  was  held  liable  for  the 
loss.3  So  where  an  agent  is  directed  by  his  principal  to  send 
a  claim  for  collection  to  A,  but  sends  it  to  B,  and  loss  ensues, 
the  agent  is  liable,  and  it  is  no  defence  that  he  acted  prudently 
in  sending  it  to  B,  since  he  had  no  right  of  choice  whatever 
under  his  instructions.^  So  where  a  landlord  gave  his  agent 
a  license  for  the  lessee  to  assign  the  lease,  but  directed  the 
agent  not  to  deliver  it  until  the  lessee  paid  the  arrears  of  rent, 
and  the  agent  on  receipt  of  a  check  delivered  the  license,  and 
the  check  was  dishonored,  the  agent  was  held  liable  for  the 
loss.^  So  if  the  agent  parts  with  the  principal's  goods  con- 
trary to  instructions  he  becomes  liable  for  conversion.^  Gen- 
erally however  he  is  liable  simply  for  a  breach  of  the  contract. 
If  the  instruction  be  to  do  an  illegal  act,  the  agent  is  not  liable 
for  failure  to  obeyJ 

If  the  agent  has  a  lien  upon  the  goods  entrusted  to  him 
for  sale  at  a  minimum  price,  he  is  entitled  to  sell  at  a  fair 
market  price,  although  below  that  fixed  by  the  principal,  in 
case  the  latter,  after  due  notice,  refuses  to  repay  the  agent's 
advances.^ 

A  deviation  from  instructions  may  be  ratified  by  the  prin- 

1  Barber  v.  Taylor,  5  M.  &  W.  527;  Adams  v.  Robinson,  65  Ala.  586; 
Frothiiigham  v.  Everton,  12  N.  H.  239;  cases  cited  below. 

2  Rechtscherd  v.  Accommodation  Bank,  47  Mo.  181 ;  Wilson  v.  Wilson, 
26  Pa.  St.  393. 

8  Whitney  v.  ^Merchants'  Union  Exp.  Co.,  104  Mass.  152. 

*  Butts  V.  Phelps,  79  Mo.  302. 

6  Rape  V.  Westacott,  1894,  1  Q.  B.  272. 

•  Laverty  v.  Snethen,  68  N.  Y.  522. 

'  Bexwell  v.  Christie,  Cowp.  395;  Cohen  v.  Kittell,  22  Q.  B.  D.  680. 
8  Parker  v.  Brancker,  22  Pick.   (Mass.)  40;    Marfield  v.   Goodhue, 
3  N.  Y.  62. 


108  PKLNCirAL   AND   AGENT. 

cipal  and  iu  some  cases  silence  after  full  knowledge  of  the 
facts  may  amount  to  ratiiication.^ 

§  89.     (II.)     Prudence. 

An  agent  acting  for  a  valuable  consideration  is  bound  to 
possess  and  to  exercise  a  reasonable  degree  of  skill,  care,  and 
diligence.  The  measure  of  such  skill,  care,  and  diligence  is 
governed  by  the  nature  of  the  under_taking,  by  the  custoins 
and  usages  of  the  profession  or  business,  and  by  the  circum- 
stances of  the  case,  but  generally  speaking,  it  may  be  said  to 
be  such  a  degree  as  is  ordinarily  observed  by  prudent  men 
engpgcd  iu  similar  undertakings,  and  under  similar  circum- 
stances.2 

One  who  assumes  to  act  as  a  patent  solicitor  is  bound  to 
possess  and  to  exercise  the  knowledge  and  skill  pertaining  to 
such  a  profession,  and  is  liable  to  his  principal  for  injury 
caused  by  ignorance  or  negligence.^  An  agent  dealing  in 
rentals  is  bound  to  use  reasonable  care  to  ascertain  the  sol- 
vency of  tenants.*  An  agent  vested  with  discretion  as  to  j)ur- 
chases  is  bound  to  exercise  the  discretion  j)rudently  and 
reasonably  in  conformity  with  the  general  instructions.''  An 
agent  authorized  to  purchase  timber  lands  must  use  due  care 
in  transmitting  descri])tions  to  his  j)rinci{)al,  but  does  not  war- 
rant the  accuracy  of  sucli  descriptions.'^  An  agent  nnist  use 
due  care  to  notify  his  principal  of  facts  affecting  the  security 
of  the  latter's  property  entrusted  to  the  agent,  and  a  failure  to 
do  so  renders  the  agent  liable  to  his  principal.^  An  agent 
authorized   to    loan    money  is  liable  for  negligently  loaning 

1  Bray  v.  (Jtinn,  5:5  (Ja.  Ill;  Hazard  v.  Spears,  4  Keyes  (N.  Y.),  460. 

2  Beat  r.  South  Devon  Ry.,  3  H.  &  C.  337;  Leighton  v.  Sargent,  27 
N.  II.  4GU;  AVright  v.  Central  R.  Co.,  IG  Ga.  38;  Ileinemann  c.  Heard, 
50  N.  y.  27,  35;  Whitney  v.  Martine,  88  N.  Y.  535. 

8  Lee  V.  Walker,  L.  R.  7  C.  P.  121. 

*  Heys  V.  Tindall,  1  B.  &  S.  206. 

*  Heinemann  v.  Heard,  50  N.  Y.  27. 

6  Page  V.  Wells,  37  Mich.  415. 

7  Devall  V.  Burbridge,  4  W.  cSc  S.  (Pa.)  305;  Storer  v.  Eaton,  50  Me. 
219. 


OBLIGATIONS   OF   AGENT.  109 

upon  worthless  or  imprudent  securities.^  An  agent  authorized 
to  effect  insurance  must  use  due  care  to  select  a  solvent  insurer 
and  secure  a  sufficient  and  adequate  policy .^  Agents  autho- 
rized to  collect  debts  or  commercial  paper  must  exercise  dili- 
gence and  care,  use  all  ordinary  or  customary  means,  and 
employ  the  available  remedies.^  If  commercial  paper  is  in  an 
agent's  hands  for  collection,  he  must  take  care  to  make  due 
presentment,  and  demand  and  give  due  notice  of  dishonor.* 
Ordinarily  an  agent  for  collection  must  take  only  money  in 
payment,  and  if  he  takes  checks  or  other  securities  is  liable  for 
any  damages  that  accrue  to  the  principal.^  But  usage  may 
authorize  the  taking  of  checks.^ 

In  general,  the  same  rules  apply  to  a  breach  of  the  contract 
resulting  from  the  agent's  negligence,  as  to  a  breacii  resulting 
from  the  agent's  disobedience  of  instructions.  An  agent  is 
presumed  by  law  to  warrant  that  he  possesses  and  will  exer- 
cise such  a  degree  of  skill  as  is  reasonably  demanded  by  the 
nature  and  circumstances  of  his  undertaking  ;  and  for  a  breach 
of  this  implied  warranty  he  will  of  course  be  liable  in  damages. 
But  he  does  not  undertake  an  absolute  liability.'^  If  the  prin- 
cipal has  knowledge  or  notice  of  the  agent's  deficiency  in  skill, 
the  presumption  of  a  warranty  is  negatived.^ 

The  measure  of  damages  in  an  action  by  a  principal 
against  his  agent  for  negligence  is  such  loss  sustained 
thereby  as  is  the  reasonable  and  probable  consequence  of 
such  negligence.^ 

1  Whitney  t'.  Martine,  88  N.  Y.  535;  Bannon  v.  Warfiekl,  42  Md.  22. 

2  Tarpin  I).  Bilton.  5  Man.  &  G.  455;  Mallough  v.  Barber,  4  Camp. 
150;  Strong  v.  High,  2  Rob.  (La.)  103. 

8  Allen  V.  Suydam,  20  Wend.  (N.Y.)  321. 

4  Allen  V.  Merchants'  Bank,  22  Wend.  (N.  Y.)  215;  First  N.  B.  v. 
Fourth  N.  B.,  77  N.  Y.  320. 

5  Hall  V.  Storrs,  7  Wis.  253 ;  Harlan  v.  Ely,  68  Cal.  522 ;  Ward  v. 
Smith,  7  Wall.  (U.  S.)  447. 

6  Russell  V.  Hankey,  6  T.  R.  12. 
T  Page  V.  Wells,  37  Mich.  415. 

8  Felt  V.  School  Dis.,  24  Vt.  297. 

9  Smith  V.  Price,  2  F.  &  F.  748;  Whiteman  v.  Hawkins,  4  C.  P.  D. 
13 ;  Neilson  v.  James,  9  Q.  B.  D.  546. 


110  PRINCIPAL   AND   AGENT. 

§  90.      (III.)     Good  faith. 

Tlie  relation  existing  between  a  principal  and  his  agent  is 
a  fiduciary  one,  and  consequently  the  most  absolute  good  faith 
is  essential.  The  principal  relies  upon  the  fidelity  and  integ- 
rity of  the  agent,  and  it  is  the  duty  of  the  agent,  in  return,  to 
be  loval  to  the  trust  imposed  in  him,  and  to  execute  it  with 
the  single  purpose  of  advancing  his  i)rincipars  interests.^ 

Upon  the  general  principle  just  stated  the  courts  will  not 
permit  an  agent  to  take  any  position,  or  to  acquire  any  rights 
or  interests  that  are  antagonistic  to  those  of  the  principal. 
He  should  not  attempt  to  act  for  both  parties  to  the  same 
transaction  without  their  consent,^  or  in  any  way  to  use  his 
authority  for  his  own  benefit.^  Thus,  an  agent  with  instruc- 
tions to  lease  or  purchase  property  for  his  principal,  cannot, 
except  with  his  principal's  consent,  lease  or  purchase  it  from 
himself.*  Nor  will  one  authorized  to  sell  or  let  property,  be 
permitted  to  become  the  purchaser  or  lessee.^  In  either  case 
the  principal  may  repudiate  the  transaction.  And  this  is  true, 
even  though  the  motive  of  the  agent  is  perfectly  honest,  and 
his  action  beneficial  to  the  princii)al.  The  law  sees  only  the 
evil  and  dangerous  tendency  of  such  transactions,  and  upon 
grounds  of  public  policy  refuses  to  enforce  them  in  any  case.^ 

1  Michoud  V.  Girod,  4  How.  (U.  S.)  503. 

2  Kaisin  v.  Clark,  41  Md.  158;  Walker  v.  Osgood,  98  Mass.  348; 
X.  Y.,  &c.  Ins.  Co.  V.  Ins.  Co.,  20  Barb.  (N.  Y.)  468;  Hinckley  r.  Arey, 
27  Me.  362;  Meyer  v.  Hanchett,  39  Wis.  419.  Cf.  Rupp  v.  Sampson,  16 
(Jray  (Mass.),  398;  Orton  v.  Scofield,  61  Wis.  382;  Nolte  v.  Hulbert, 
37  Oh.  St.  445;  Greenwood,  &c.  Co.  v.  Georgia  Home  Ins.  Co.,  72 
Miss.  46. 

8  Bunker  v.  Miles,  30  Me.  431. 

4  Gillett  V.  Peppercorne,  3  Beav.  78 ;  Conkey  v.  Bond,  36  N.  Y.  427 ; 
Taussig  V.  Hart.  58  X.  Y.  425  ;  Tewksbury  r.  Spruance,  75  111.  187 ;  Bos- 
well  V.  Cunningham,  32  Fla.  277;  Davis  v.  Hamlin,  108  111.  39;  Green- 
field Sav.  Bk.  V.  Simons,  133  :Mass.  415. 

6  Oliver  v.  Court,  8  Price,  127 ;  Thompson  v.  Havelock,  1  Camp.  527 ; 
Kerfoot  v.  Hyman,  52  111.  512:  Eldri.lge  v.  Walker,  60  111.  230;  Martin 
V.  Moiilton,  8  N.  H.  504;  People  v.  Township  Bd.,  11  Mich.  222;  Bain 
V.  Brown,  56  X.  Y.  285. 

«  Michoud  V.  Girod,  4  How.  (U.  S.)  503;  People  v.  Township  Bd.,  11 
Mich.  222 ;  Taussig  v.  Hart,  58  X.  Y.  425. 


OBLIGATIONS    OF    AGENT.  Ill 

Even  a  custom  which  converts  an  agent  into  a  principal,  or 
puts  him  into  a  position  antagonistic  to  the  interests  of  his 
principal,  cannot  be  given  effect  unless  known  to  the  principal 
and  at  least  impliedly  assented  to  by  him.i 

An  agent  cannot,  through  a  failure  to  perform  his  duty, 
acquire  interests  in  conflict  with  those  of  his  principal.  For 
example,  an  agent  instructed  to  pay  the  taxes  on  his  princi- 
pal's property,  and  neglecting  so  to  do,  cannot  acquire  a  valid 
title  to  the  land  by  purchase  upon  tax  sale,  bat  will  be  re- 
garded as  a  trustee  for  his  principal.^  And  an  agent  whose 
duty  it  is  to  compromise  a  claim  against  his  principal,  may 
not  purchase  the  claim  at  a  discount,  and  then  enforce  it  in 
full  against  his  principal.^^  An  attorney  engaged  to  advise  on 
a  title  cannot  purchase  an  outstanding  adverse  title  and  set  it 
up  against  his  client ;  he  will  hold  the  adverse  title  in  trust 
for  the  latter.'*  An  agent  of  a  corporation  commits  a  breach 
of  trust  if  he  undertakes  to  secure  voting  proxies  from  share- 
holders in  order  to  oust  an  existing  board  of  directors.^ 

Upon  the  same  doctrine  one  who  deals  with  an  agent  know- 
ing that  the  latter  is  not  in  that  transaction  showing  good  faith 
toward  his  principal,  deals  at  his  peril  as  a  party  to  the  agent's 
bad  faith  or  fraud.*^  Good  faith  requires  the  agent  to  give 
notice  to  the  principal  of  all  facts  coming  to  his  knowledge 
which  may  affect  the  principal's  interests.' 

An  agent  may  be  prevented  by  injunction  from  disclosing 
trade  secrets  of  his  employer  learned  while  in  the  employ- 
ment.^ 

1  Robinson  v.  Mollett,  L.  R.  7  H.  L.  802  ;  De  Bussche  v.  Alt,  L.  R. 
8  Ch.  Div.  286. 

2  Barton  v.  Moss,  32  111.  50 ;  Krutz  v.  Fisher,  8  Kans.  90 ;  Fisher  v. 
Krutz,  9  Kans.  501 ;  Geisinger  v.  Beyl,  80  Wis.  443. 

3  Noyes  v.  Landon,  59  Vt.  569. 

4  Eoff  V.  Irvine,  108  Mo.  378. 

6  Townsley  v.  Bankers'  Life  Ins.  Co.,  56  App.  Div.  232. 

s  Hegenniyer  v.  Marks,  37  Minn.  6. 

'  Devall  V.  Burbridge,  4  W.  &  S.  (Pa.)  305;  Storer  v.  Eaton,  50  Me. 
219. 

8  Robb  t'.  Green,  1895,2  Q.  B.  315;  Louis  v.  Smellie,  73  L.  T.  R.  226; 
Little  V.  Gallus,  4  N.  Y.  App.  Div.  569. 


112  PRINCIPAL   AND   AGENT. 

Akin  to  the  rule  of  loyalty  and  good  faith  is  one  to  the  effect 
that  an  agent  may  not  deny  his  princii)ars  title.^  When,  by 
virtue  of  his  fiduciary  relation  to  the  principal,  an  agent  comes 
into  the  possession  of  the  principal's  money  or  property,  and 
is  subsc(piently  called  upon  by  the  principal  to  account  for  it, 
he  will  not  be  allowed,  as  a  general  rule,  to  dispute  the  title  of 
the  principal  in  such  money  or  property.  He  may  show  in 
defence,  however,  that  he  has  been  divested  of  the  property  by 
one  holding  a  paramount  title,^  or  that  the  principal's  title  has 
either  been  terminated  or  transferred  to  the  person  under 
whom  he  claims.^  Likewise,  an  agent  cannot,  in  defence  of 
an  action  by  his  principal  to  recover  money  in  his  hands,  set 
up  the  illegality  of  the  transaction  under  which  he  received  it 
or  of  the  purpose  to  which  it  was  to  be  devoted."*  In  like  man- 
ner an  agent  who  receives  money  to  the  use  of  his  i)rincipal  is 
bound  to  pay  it  over  notwithstanding  any  claims  of  third 
persons.^  But  if  it  is  paid  to  the  agent  wrongfully,  or  under 
duress,  or  under  a  mistake  of  fact,  he  may  repay  it  to  the 
person  who  so  paid  it  to  him.^^ 

§  91.     (IV.)     Accounting. 

It  is  the  duty  of  an  agent  to  keep  his  principal's  money  and 
property  separate  from  his  own  or  third  parties,  to  keep  accu- 
rate accounts  of  all  dealings  with  the  same,  to  preserve  and 
produce  upon  demand  all  documents  relating  to  the  same,  to 
render  an  account  of  his  transactions,  and  to  deliver  or  pay 
over  to  the  principal,  upon  demand,  all  property,  documents, 
or  money,  belonging  to  the  principal,  and  all  profits  resulting 
therefrom,'  including  all  profits  which  have  accrued  to  the 

1  Green  v.  Maitland,  4  Beav.  524;  Betteley  v.  Reed,  4  Q.  B.  511;  Col- 
lins V.  Tillou,  26  Conn.  308. 

•^  Biddle  r.  Bond,  6  B.  &  S.  225;  Bliven  v.  Hudson  River  Rd.  Co.,  36 
N.  Y.  403,  406 ;  Western  Trans.  Co.  v.  Barber,  56  N.  Y.  514,  552. 

8  Marvin  i'.  Ellwood,  11  Pai-^^e's  Ch.  (N.  Y.)  365. 

*  Baldwin  Bros.  v.  Potter,  4G  Vt.  402;  Kiewert  v.  Rindskopf,  40  Wis. 
81;  Snell  v.  Pells,  113  111.  145. 

6  Nickolson  v.  Knowles,  5  Madd.  47;  Roberts  v.  Ogilby,  9  Price,  269. 

6  Posf,  §  204. 

'  Gray  v.  Haig,  20  Beav.  219;  Clarke  i-.  Tipping,  9  Beav.  284;  Dads- 


OBLIGATIONS    OF   AGENT.  113 

agent  as  a  result  of  his  transactions,^  wliether  such  transac- 
tions were  within  or  without  the  scope  of  the  authority ,2  and 
whether  legal  or  illegal.^ 

(1)  Keeping  property  and  money  separate.  If  an  agent 
commingles  the  goods  or  money  of  his  principal  with  his  own, 
so  that  the  separate  interests  cannot  be  easily  or  accurately 
distinguished,  everything  not  clearly  proved  to  be  his  own, 
will  be  deemed  to  belong  to  the  principal.'*  If  an  agent 
deposits  his  principal's  money  in  a  bank  in  his  own  name  or  to 
his  own  account,  he  is  the  loser  in  case  the  bank  fails." 
Funds  deposited  in  the  principal's  name,  or  taken  by  a  bank 
or  other  person  with  notice  of  the  principal's  interest,  are  in 
the  nature  of  trust  funds,  and  may  be  followed  by  the  princi- 
pal until  they  pass  into  the  hands  of  a  purchaser  for  value 
without  notice.® 

(2)  Keeping  of  accounts.  If  the  nature  of  the  undertaking 
requires,  it  is  the  duty  of  an  agent  to  keep  reasonably  full, 
regular,  and  accurate  accounts  of  liis  business,  including  both 
receipts  and  disbursements,  and  to  preserve  all  vouchers  and 
other  evidential  papers  which  may  be  of  value  to  his  prin- 
cipal.'^ If  an  agent  fails  to  keep  intelligible  and  accurate 
accounts,  everytliing  will  be  presumed  against  him  that  is 
consistent  with  the  established  facts  of  tiie  case.^ 

(3)  Rendering  accounts.  It  is  the  duty  of  an  agent  to 
render  a  full  and  accurate  account  to  his  principal  of  all  trans- 
well  V.  Jacobs,  U  Ch.  Div.  278;  Harsant  v.  Blaine,  56  L.  J.  Q.  B.  511; 
Jett  V.  Hempstead,  25  Ark.  462;  Baldwin  v.  Potter,  46  Vt.  402. 

1  Gardner  v.  Ogden,  22  N.  Y.  327  ;  Button  v.  Willner,  52  X.  Y.  312 ; 
LafEerty  v.  Jelly,  22  Tnd.  471. 

2  Watson  V.  Union  Iron  Co.,  15  Brad.  (III.)  .509. 

3  Tenant  v.  Elliott,  1  B.  &  P.  3 ;  Baldwin  Bros.  v.  Potter,  46  Vt.  402. 

*  Gray  v.  Haig,  20  Beav.  219;  Lupton  v.  White,  15  Ves.  432;  Hart  v. 
Ten  Eyck,  2  Johns.  Ch.  (N.  Y.)  62. 

5  Massey  v.  Banner,  1  Jac.  &  W.  241 ;  Williams  v.  Williams,  55  Wis. 
300;  Naltner  v.  Dolan,  108  Ind.  500. 

6  Post,  §  178. 

■^  Gray  v.  Haig,  20  Beav.  219 ;  Clarke  0.  Tipping,  9  Beav.  284  ;  Dads- 
well  V.  Jacobs,  34  Ch.  Div.  278;  Haas  v.  Damon,  9  Iowa,  589;  Kerfoot 
V.  Hyman,  52  111.  512. 

^  Gray  v.  Haig,  supra. 

8 


114  ritlNCirAL    AND    AGENT. 

actions  cuiiiiccted  with  the  agency,  and,  since  the  relation  is 
a  fiduciary  one,  the  principal  has  a  right  to  compel  the  render- 
ing of  such  an  account  in  equity.*  TJiis  equitable  remedy  is 
not  based  upon  the  complicated  nature  of  the  accounts  (equit- 
altlc  assumpsit),^  but  rests  upon  the  fiduciary  nature  of  the 
relationship.^  Even  in  the  case  of  accounts  rendered  and 
accepted,  the  account  may  be  reopened  in  equity  on  the 
ground  of  fraud.^  An  agent  sued  as  a  fiduciary  is  not,  ordi- 
narilv,  permitted  to  jilcad  tlie  Statute  of  Limitations  unless  he 
has  in  fact  rendered  an  account,  or  demand  has  been  made 
iij)on  him  to  do  so.^ 

Although  the  right  of  set-off  or  counter-claim  ordinarily 
exists  in  favor  of  an  agent,  he  will  not  be  j)ermitted  to  enforce 
it  in  cases  where  such  enforcement  would  be  in  direct  viola- 
tion of  the  agent's  duty  as  a  fiduciary.  For  example,  if  a 
principal  directs  his  agent  to  collect  a  debt  and  to  apply  it 
first  to  the  payment  of  certain  demands  due  to  third  persons, 
and  then  to  the  payment  of  a  mortgage  held  by  the  agent,  but 
the  agent  collects  the  debt  and  applies  it  all  to  the  payment 
of  his  own  claim,  the  principal  may  recover  the  sum  collected 
by  the  agent,  and  ai)iilicable  to  tlie  ])ayinent  of  the  third  per- 
sons' claims,  since  the  agent  has  acted  in  breach  of  his  special 
trust.^ 

(4)  Dt'Uverij  of  propertjj  and  profits.  The  agent  must  deliver 
to  the  ])rincipal,  ujion  demand,  all  the  proj)erty  of  the  i)riiici- 
pal  in  his  iiands,  all  proceeds  of  pro))erty  disposed  of,  aud  all 
profits  accruing  from  the  agency."  The  agent  cannot,  without 
the  consent  of  his  principal,  make  for  himself  any  jiei'sonal 

1  Makepeace  v.  Rogers,  4  De  G.  J.  &  S.  649  ;  Marvin  v.  Brooks,  91  N.  Y. 
71  ;  Warren  v.  Holbrook,  95  Mich.  185;  Rippe  v.  Stogdill,  61  Wis.  ;38. 

2  Langdell,  3  Harv.  Law  Rev.  237;  ante,  §  76. 
8  Padwick  v.  Stanley,  9  Hare,  627. 

*  Williamson  v.  Barbour,  9  Ch.  Div.  520. 

*  Teed  c  Beere,  28  L.  J.  Ch.  7S2 ;  Biirdick  r.  Garrirk,  L.  R.  5  Ch. 
233  ;  Jett  v.  Hempstead,  25  Ark.  •162  ;  Mundeville  v.  Welch,  5  Wheat. 
(U.  S.)  277. 

6  Tagg  V.  Bowman,  108  Pa.  St.  273. 

^  Topham  v.  Braddick,  1  Taunt.  572  ;  Crosskey  v.  Mills,  1  C.  M.  & 
R.  298. 


OBLIGATIONS   OF   AGENT.  115 

profits  in  the  conduct  of  the  principal's  business.  He  must, 
accordingly,  pay  over  to  his  principal  all  such  profits  made  in 
the  course  of  the  agency .^  This  rule  is  applicable,  even  in 
cases  where  the  agent  took  the  risk  of  loss,^  or  the  principal 
suffered  no  injury.^  No  secret  profits,  or  profits  made  in 
breach  of  the  trust,  are  permitted  to  remain  in  the  hands  of 
the  agent.  If  the  agent  receives  a  bribe,  he  must  pay  it  over 
to  his  principal.* 

§  92.     (V.)  Delegation  of  authority:  appointment  of  sub-agents. 

In  all  matters  involving  judgment,  skill,  or  discretion,  it  is 
the  duty  of  an  agent  to  act  in  person  unless  he  has  the  express 
or  implied  authority  of  his  principal  to  employ  su])-agents. 
No  agent  can  without  such  permission  from  his  principal 
delegate  his  discretionary  authority.  Delegatus  non  jjotest 
delegare  is  the  maxim,  and  is  founded  upon  the  confidential 
character  of  the  relation.^ 

The  doctrine  involves,  however,  three  quite  distinct  con- 
siderations :  first,  the  delegation  to  a  deputy  of  the  perform- 
ance of  mechanical  or  ministerial  acts  in  execution  of  the  plan 
determined  upon  by  the  agent ;  seco7id,  the  delegation  to  a  sub- 
agent  of  some  discretionary  power  without  seeking  to  create  any 
privity  between  such  sub-agent  and  the  principal ;  third,  the  ap- 
pointment of  a  second  agent  as  the  agent  of  the  principal,  and 
therefore  in  privity  with  him.  The  first  case  lias  to  do  with  the 
delegation  of  non-discretionary  duties ;  the  second,  with  tlie 
delegation  of  discretionary  duties  ;  the  third,  with  the  perform- 
ance of  the  duty  or  power  to  employ  agents  for  the  principal. 
In  the  first  two  cases  the  agent  is  acting  for  himself  in  employ- 

1  Parker  v.  McKenna,  L.  R.  10  Ch.  96;  De  Bussche  v.  Alt,  8  Ch.  Div. 
286;  In  re  North  Australian  Territory  Co.,  1892,  1  Ch.  D.  322;  Eldridge 
V.  Walker,  60  111.  230;  Button  v.  VVillner,  52  N.  Y.  312;  Bunker  v.  Miles, 
30  Me.  431. 

2  Williams  ;;.  Stevens,  L.  R.  1  P.  C.  352. 

3  Parker  v.  McKenna,  supra. 

*  Mayor  v.  Lever,  1891,  1  Q.  B.  168. 

6  Combe's  Case,  9  Co.  R.  75;  Blore  v.  Sutton,  3  Meriv.  267;  Catlin  v. 
Bell,  4  Camp.  183;  Cockran  v.  Irlam,  2  M.  &  S.  301  ;  Campbell  v.  Reeves, 
3  Head  (Tenn.),  226 ;  Loomis  v.  Simpson,  13  Iowa,  532. 


116  PRINCIPAL   AND   AGENT. 

ing  his  assistants  ;  in  the  third  case  lie  is  acting  for  his  j)rincipal 
in  employing  them.  In  neither  of  the  first  two  cases  can 
tliere  be  any  privity  between  the  sub-agents  and  the  ])rincipal, 
and  the  sole  question  is,  had  the  agent  any  authority  to  act 
through  such  sub-agents,  or  should  he  have  acted  in  person  ? 
In  the  third  case  the  sole  question  is,  was  the  agent  vested 
with  authority  to  engage  agents  for  liis  principal,  or  was  it 
intended  eitlier  that  he  should  act  in  person,  or  should  employ 
for  himself  such  additional  assistants  as  he  might  need  ? 

§  93.     Same  :  (1)  delegation  of  non-discretiouary  duties. 

AVhere  the  particular  act  to  be  done  is  purely  ministerial  or 
non-discretionary,  involving  no  act  of  deliberation  or  judg- 
ment, the  agent  may  employ  a  deputy  or  assistant  to  perform 
the  act ;  and  where  the  general  act  to  be  done  is  one  involving 
discretion,  and  the  agent,  having  exercised  the  discretion,  has 
still  to  perform  in  execution  of  his  determined  purpose  a 
particular  act,  ministerial  or  non-discretionary  in  character, 
lie  may  employ  a  deputy  or  assistant  to  perform  such  minis- 
terial act.i  Thus,  if  an  agent  is  invested  with  discretion  to 
make  commercial  paper,  he  may,  after  having  exercised  this 
discretion,  and  determined  upon  the  making  of  the  paper, 
delegate  to  a  sub-agent  the  performance  of  the  mechanical  act 
of  writing  and  subscribing  the  papcr.^  The  same  is  true  of 
other  contracts,  as  insurance  policies,^  or  bills  of  lading.* 

§  94.     Same  :  (2)  delegation  of  discretionary  duties. 

Some  contracts  are  assignable,  and  some  are  non-assignable. 
None  are  assignable  in  which  there  is  an  element  of  conlidcnce 

1  jNIason  r.  Joseph,  1  Smith,  406;  Rossiter  r.  Trafalgar  Life  Assurance 
Co.,  27  Beav.  .377;  St.  IMargaret'.s  Burial  Board  v.  Thomp.son,  L.  R. 
6  C.  P.  445;  Williams  v.  Woods,  10  Md.  220;  Reuwick  r.  Bancroft,  56 
Iowa,  .")27;  Eggleston  v.  Boardman,  ^7  Mich.  14. 

2  Ex  parte  Sutton,  2  Cox,  84;  Commercial  Bank  v.  Norton,  1  Hill 
(N.  Y.),  501;  Sayre  v.  Nichols,  7  Cal.  .535. 

3  Rossiter  v.  Trafalgar  Assurance  Co.,  27  Beav.  377;  Grady  v.  Ameri- 
can Cent.  Ins.  Co.,  60  Mo.  116. 

*  Newell  c.  Smith,  49  Yt.  255. 


OBLIGATIONS    OF   AGENT.  117 

or  trust  in  the  skill,credit,  character,  or  discretion  of  another.^ 
Agency  is  peculiarly  a  relation  of  trust  and  confidence,  and 
hence  the  rule  is  strict  that  an  agent  cannot  delegate  to 
another  the  exercise  of  the  judgment  and  discretion  which 
he  has  undertaken  personally  to  place  at  the  service  of  his 
principal.^  Accordingly  an  agent  employed  to  buy  or  sell 
property  for  his  principal  cannot  delegate  to  another  the 
duty  of  buying  or  selling,  because  the  principal  contracts  for 
the  judgment  and  discretion  of  the  agent  himself.^  Nor 
an  attorney  engaged  to  conduct  a  litigation.'^  Nor  any  other 
fiduciary.^ 

If  an  agent  in  breach  of  his  duty  to  act  in  person  commits 
the  duty  to  another,  he  renders  himself  liable  to  his  principal 
for  all  damages  resulting  therefrom.  If,  for  example,  he  is 
authorized  to  sell  goods,  and  turns  them  over  instead  to  a  sub- 
agent,  he  is  guilty  of  conversion,  and  must  account  in  full  for 
the  value  of  the  goods.^  And  for  any  negligence  or  miscon- 
duct of  a  sub-agent  whose  appointment  is  not  authorized  by 
the  principal,  the  agent  remains  liable.''' 

Tiie  rule,  therefore,  is  that  an  agent  cannot,  without 
authority,  delegate  to  a  substitute  the  exercise  of  the  judg- 
ment or  discretion  which  he  has  contracted  to  place  at  the 
service  of  the  principal. 

To  this  rule,  there  are  no  real  exceptions.  All  seeming 
exceptions  range  themselves  under  the  head  of  an  actual  or 

1  Ilnffcut's  Anson  on  Cent.  p.  287  et  scq.  ;  Robson  v.  Drummond, 
2  B.  &  A.  303;  Arkansas  Smelting  Co.  v.  Belden  Mining  Co.,  127  U.  S. 
379 ;  La  Rue  v.  Goezinger,  84  Cal.  281 ;  Rochester  Lantern  Co.  v.  Stiles, 
135  N.  Y.  209. 

2  Ante,  §  92. 

8  Coles  V.  Trecothick,  9  Ves.  234;  Cockran  v.  Irlam,  2  I\I.  &  S.  301 ; 
Wright  V.  Boynton,  37  N.  H.  9;  Hunt  v.  Douglass,  22  Vt.  128. 
*  Eggleston  v.  Boardman,  37  Mich.  14. 

5  Howard's  Case,  L.  R.  1  Ch.  561 ;  Ex  j)arte  Birmingham  Banking 
Co.,  L.  R.  3  Ch.  651. 

6  Catlin  V.  Bell,  4  Camp.  183;  Loomis  v.  Simpson,  13  Iowa,  532; 
Campbell  v.  Reeves,  3  Head  (Tenn.),  226;  Laverty  v.  Snethen,  68  N.  Y. 
522. 

7  Barnard  v.  Coffin,  141  Mass.  37;  Fairchild  v.  King,  102  Cal.  320. 


]1,S  PRINCIPAL    AND    ACKXT. 

iinplicd  authority  from  the  ))rincii):il  to  the  agent  to  em])loy 
Bub-agents,^  or  under  tlie  head  of  a  ratification  or  ac(|uicscence 
in  the  cniploynient  of  such  sub-agents.^  Such  authority  may 
arise  from  actual  agreement  or  fi-om  usage.^  If  there  be  any 
exception  it  is  to  be  sought  in  cases  of  necessity  or  emergency 
not  contemplated  l)y  the  parties.* 

§  95.     Same:  (3)  sub-agency  by  authority. 

Authority  to  employ  sub-agents  must  he  sought  in  the 
terms  of  the  original  appointment,  or  in  the  usages  or  cus- 
toms of  the  particular  agency,  or  in  the  obvious  necessities  of 
the  case.^  It  is  entirely  clear  that  certain  duties  confided  to 
an  agent  cannot  be  performed  by  him  personally,  and  that  he 
will  and  must  employ  sub-agents  in  order  to  accomplish  the 
purposes  of  the  agency.  In  such  cases  there  is  an  implied 
authority  from  the  principal  to  the  agent  to  make  use  of 
such  additional  instrumentalities  as  may  be  necessary  and 
prudent. 

Assuming  such  authority  from  the  principal  to  be  expressed 
or  implied  in  the  terms  or  nature  of  the  agency,  the  second- 
ary question  is  whether  the  agent's  liability  is  merely  to  use 
due  care  in  the  selection  of  the  sub-agent,  or  whether  he  also 
remains  liable  for  the  negligence  or  misconduct  of  such  sub- 
agent.  The  answer  hinges  ui)on  the  notion  of  privity  of  con- 
tract or  undertaking.  Upon  this,  there  may  be  two  views : 
first,  that  the  principal's  sole  contract  is  with  the  agent,  but 
that  it  authorizes  the  agent  to  act  through  sub-agents,  although 
remaining  liable  for  all  consequences;  second,  that  the  prin- 
ci])al  authorizes  the  agent  to  make  for  the  principal  a  contract 
with  a  suitable    sub-agent,  and  create  thereby   a  i>rivity   of 

^  De  Biissche  v.  Alt,  S  Cli.  1)1  v.  286. 

2  AVhite  V.  Proctor,  4  Taunt.  209  ;  Haluptzok  v.  Great  Northern  Ry., 
55  Minn.  446. 

8  De  Bu.'^sche  v.  Alt,  8  Ch.  Div.  286;  Laussatt  v.  Lippincott,  6  S.  &  R. 
(Pa.)  386;  Harralson  v.  Stein,  50  Ala.  347;  Arff  v.  Star  Fire  Ins.  Co., 
125  X.  Y.  57;  Carpenter  v.  Gernmn  Am.  Ins.  Co.,  135  N.  Y.  298. 

*  A  nle,  §  .50. 

»  De  Bussche  v.  Alt,  8  Ch.  Div.  286,  310. 


OBLIGATIONS   OF   AGENT.  119 

contract  between  the  principal  and  such  sub-agent.  Under 
the  first  view  the  agent  alone  is  responsible  to  the  principal, 
and  the  sub-agent  is  responsible  to  the  agent. ^  Under  the 
second  view,  the  first  agent  discharges  his  obligation  as  soon 
as  he  appoints  a  suitable  second  agent,  and  the  latter  is 
responsible  directly  to  the  principal,  or,  in  other  words,  the 
first  agent  is  merely  an  agent  to  make  contracts  of  employ- 
ment for  his  principal.^ 

The  problem  is  well  illustrated  in  cases  where  A  deposits 
in  his  home  bank  for  collection  commercial  paper  payable  at 
a  distance.  In  such  a  case  A  knows  that  the  home  bank 
must  send  it  to  a  correspondent  bank  at  the  place  where  it  is 
payable.  The  problem  is  whether  A,  under  these  circum- 
stances, simply  authorizes  the  home  bank  to  make  use  of  a 
sub-agent  in  the  collection  of  the  paper,  or  whether  he  author- 
izes the  home  bank  to  employ  an  additional  agent  in  his  be- 
half. If  the  first,  then  the  home  bank  is  liable  for  the 
manner  in  which  the  sub-agent  performs  the  duty,  and  the 
sub-agent  is  liable  to  the  home  bank  ;  if  the  second,  then 
the  correspondent  bank  is  liable  to  the  principal,  and  the 
home  bank  is  exonerated  if  it  has  used  due  care  in  the -selec- 
tion of  the  additional  agent.  The  courts  differ  widely  in  the 
view  taken  of  this  situation.  One  class  of  cases  holds  that  A 
contracts  for  the  skill  and  judgment  of  the  home  bank  in  the 
collection  of  the  paper,  leaving  the  bank  free  to  employ  such 
instrumentalities  as  it  sees  fit,  but  assuming  himself  no 
responsibility  for  the  conduct  of  the  sub-agents.^  Another 
class  of  cases  holds  that  A  under  such  circumstances  con- 
templates the  appointment  of  a  sub-agent,  and  impliedly 
authorizes  the  home  bank  to  make  such  an  appointment  in 
his  behalf  ;  that  the  obligation  of  the  home  bank  is  to  use  due 
care  in  making  such  appointment  ;  and  that  there  arise  two 
contracts,  (1)  the  contract  of  the  first  bank  with  A  to  use  due 

1  New  Zealand,  &c.  Co.  v.  Watson,  L.  R.  7  Q.  B.  D.  374. 

2  De  Bussche  v.  Alt,  8  Ch.  Div.  286. 

3  Exchange  N.  B.  v.  Third  N.  B.,  112  U.  S.  276;  Simpson  v.  Waldby, 
63  Mich.  439;  Power  v.  First  N.  B.,  6  JNIont.  251;  Allen  v.  Merchants' 
Bank,  22  Wend.  (N.  Y.)  215. 


120  PRINCIPAL    AND    AGENT. 

care  in  selecting  a  sub-agent,  and  ('2)  the  contract  of  the  sec- 
ond bank  with  A  to  use  due  care  in  the  collection  of  the 
paper. ^  On  the  first  view  there  is  no  privity  of  contract 
between  A  and  the  correspondent  bank,  while  on  the  second 
there  is  such  privity.  The  same  question  arises  in  the  case  of 
the  appointment  of  a  notary  by  the  bank  ;2  and  in  other  like 
cases.'^ 

It  will  be  observed  that  the  question  in  these  cases  is  not 
as  to  the  power  of  the  home  bank  to  appoint  a  sub-agent,  but 
as  to  the  power  of  the  home  bank  to  create  a  contract  between 
the  principal  and  a  third  party.  It  is  not  the  delegation  of 
power  but  the  possession  of  power  that  is  involved.  And  it 
is  believed  that  this  is  the  question  in  every  case  whore  it  is 
sought  to  establish  a  privity  of  contract  between  the  principal 
and  a  so-called  sub-agent.^  Unhappily  the  courts  are  not 
agreed  upon  the  legal  effect  to  be  given  to  the  same  set  of 
circumstances,  and  therefore  no  definite  rule  can  be  laid  down 
as  to  when  the  exercise  of  the  authority  to  act  through  sub- 
agents  does  or  does  not  create  a  privity  between  the  principal 
and  such  sub-agents. 

§  96.     Del  credere  agenta. 

A  del  credere  agent  is  one  who,  in  consideration  of  an  addi- 
tional compensation,  undertakes  to  guarantee  the  payment  to 
the  principal  of  the  debts  arising  and  becoming  due  through 

»  Guelich  v.  National  State  Bank,  5G  Iowa,  434;  Dorchester  Bk.  v. 
New  England  Bk.,  1  Cush.  (Mass.)  177;  Merchants'  N.  B.  v.  Goodman, 
109  Pa.  St.  422;  Daly  v.  Bank,  56  Mo.  94;  First  N.  B.  v.  Sprague,  34 
Neb.  318;  Irwin  v.  Reeves  Pulley  Co.,  20  Ind.  App.  101,  43  N.  E.  GOl. 

2  Ayrault  v.  Pacific  Bank,  47  N.  Y.  570 ;  Bank  v.  Butler,  41  Oh.  St. 
519. 

8  Dun  V.  City  N.  B.,  .58  Fed.  Rep.  174,  where  it  was  held  that  one  who 
seeks  through  a  commercial  agency  information  as  to  the  standing  of  a 
person  residing  in  a  distant  city,  contemplates  the  employment  of  a  sub- 
agent  at  the  place  where  the  third  person  lives  and  becomes  the  principal 
of  such  sub-agent,  to  whom,  and  not  to  the  commercial  agency,  he  nmst 
look  for  damages  for  negligence  or  fraud. 

*  De  Bussche  v.  Alt,  8  Ch.  Div.  286;  Barnard  v.  Coffin,  141  Mass.  37; 
Bradstreet  v.  Everson,  72  Pa.  St.  124;  Cummins  v.  Heald,  24  Kans.  600. 


^  OBLIGATIONS   OF   AGENT.  121 

his  agency.^  His  powers  and  duties  are,  in  general,  of  the 
same  nature  and  extent  as  those  of  an  ordinary  agent  or 
factor.  The  authorities  do  not  agree,  however,  whether  tlie 
legal  effect  of  his  special  undertaking  is  to  make  him  a  mere 
surety  for  the  vendee,  or  primarily  liable  for  the  proceeds  of 
the  sale.2  In  England,  it  has  been  held  that  he  is  merely  a 
surety  ;  that  is  to  say,  that  he  guarantees  the  solvency  of  the 
vendee,  and  in  case  of  default,  undertakes,  himself,  to  pay;^ 
but  later  cases  clearly  modify  this.*  In  the  United  States,  on 
the  other  hand,  it  is  generally  held,  that  the  del  credere  agent 
i^jjrimarily  liable  for  the  proceeds  of  the  goods  sold,  as  for 
goocTs  sold  to  Tmn.^  The  question  becomes  of  importance, 
under  the  provisions  of  the  Statute  of  Frauds.  If  the  del 
credere  agent  be  regarded  as  a  mere  surety,  his  contract  is  to 
answer  for  the  debt  of  another,  and  must  therefore  be  in  writ- 
ing. But  if  he  is  himself  absolutely  liable  in  the  first  instance, 
his  undertaking  is  an  original  one,  and  not  within  the  provi- 
sions of  the  statute.^  So,  too,  if  he  Agrees  to  make  advances 
to  his  principal,  and  after  making  them  seeks  to  prove  against 
the  principal's  bankrupt  estate,  it  is  held  that  he  must  first 
exhaust  the  property  in  his  hands,  and  prove  only  for  a 
balanced 

It  is  sometimes  difficult  to  determine  whether  a  transaction 
amounts  to  a  sale  between  A  and  B  or  the  creation  of  a  del 
credere  agency.  It  is  stated  broadly  that  "  the  law  implies  a 
mere  consignment  of  goods  for  sale  upon  a  del  credere  com- 
mission, and  not  a  sale  thereof,  where  the  contract  provides 
that  the  consignee  shall  receive  them,  and  return  periodically 

1  Morris  v.  Cleasby,  4  M.  &  S.  566;  Hornby  v.  Lacy,  6  M.  &  S.  166. 

2  Lewis  i'.  Brehme,  33  Md.  412. 

8  Morris  v.  Cleasby,  4  M.  &  S.  566;  Hornby  v.  Lacy,  6  M.  &  S.  166. 

*  Couturier  v.  Hastie,  8  Ex.  40 ;  Wickham  v.  Wickham,  2  Kay  & 
Johns.  478. 

6  Lewis  I'.  Brehme,  33  Md.  412;  Sherwood  v.  Stone,  14  X.  Y.  267; 
Swan  V.  NesmiLh,  7  Pick.  (Mass.)  220;  Wolff  v.  Koppel,  5  Hill  (N.  Y.), 
458. 

®  Sherwood  v.  Stone,  supra ;  Swan  v.  Nesmith,  supra. 

1  Gihon  V.  Stanton,  9  N,  Y.  476;  Balderston  v.  Rubber  Co.,  18  R.  L 
338.     Compare  Dolan  v.  Thompson,  126  Mass.  183. 


122  riU-NXIPAL    AND    AGENT. 

to  the  consignor  the  proceeds  of  the  sales,  at  prices  charged 
by  the  hitter,  the  consignee  guarantying  payment  thereof."  ' 

2.    Gratuitous  Agents. 

§  97.     Obligations  of  gratuitous  agents. 

Tlie  agent  may  nndertake  to  perform  a  service  for  the  prin- 
cipal gratuitously.  In  such  case  the  promise,  being  witliout 
consideration,  is  unenforceable,  and  the  agent  is  not  liable  for 
refusing  or  neglecting  to  perform.^  But  if  the  agent  enter 
upon  the  performance  of  the  undertaking  he  is  bound  to  exer- 
cise that  degree  of  care  and  skill  for  which  he  undertakes. 
The  real  question  in  such  cases  is,  what  amount  of  care  did 
the  gratuitous  agent  nndertake  to  bestow  in  the  transaction 
committed  to  him?  To  this  various  answers  have  been  re- 
turned. Some  say  that  he  undertakes  to  use  only  slight  care 
and  is  therefore  liable  only  for  gross  negligence.^  Others  say 
that  he  undertakes  for  as  much  care  as  he  would  bestow  upon 
his  own  affairs.*  Still  others  add,  that  he  must  exercise  such 
skill  as  he  possesses  ;5  or,  in  case  he  holds  himself  out  as 
skilful  in  a  particular  calling,  then  such  as  might  be  reason- 
ably expected  from  one  so  holding  himself  out;*'  or,  in  case 
he  undertakes  an   act  highly  dangerous  to  human   life  and 

1  Xational  Cordage  Co.  r.  Sims,  44  Neb.  148;  ante,  §  2. 

2  Thorne  v.  Deas,  4  Johns.  (X.  Y.)  81,  where  the  subject  is  exhaus- 
tively discussed. 

^  Coggs  I'.  Bernard,  2  Ld.  Rayni.  901),  wliich.  although  a  case  of  gra- 
tuitous bailment,  is  the  fountain  source  of  the  doctrine  of  gratuitous 
undertakings  generally.  See  also  Beardslee  v.  Richardson,  11  AVend. 
(X.  Y.)  25;  Laniploy  v.  Scott,  24  Miss.  528;  Eddy  v.  Livingston,  35  Mo. 
487. 

*  Shiells  V.  Blackburne,  1  H.  Bl.  159;  Moffalt  v.  Batcman,  L.  R. 
3  P.  C.  11.5. 

6  AVilson  V.  Brett,  11  M.  &  W.  11.3. 

8  Whitehead  v.  Greetliam,  2  Bing.  464;  Beal  v.  South  Devon  Ry., 
3  H.  &  C.  337;  Durnford  v.  Patterson,  7  Martin  (La.),  460;  Gill  v.  I\Iid- 
dleton,  105  I\Iass.  477;  McXevins  v.  Lowe,  40  111.  209:  Lsham  r.  Post, 
141  N.  Y.  100,  where  it  was  held  that  a  banker  undertaking  to  loan 
money  gratuitously  was  bound  "to  exercise  the  skill  and  knowledge  of  a 
banker  engaged  in  loaning  money  for  himself  and  for  his  customers." 


OBLIGATIONS   OF   AGENT.  123 

safety,  then  such  care  and  skill  as  is  proportioned  to  the  risk,^ 
or,  in  case  lie  expressly  undertakes  to  do  a  certain  thing,  and 
intentionally  does  the  contrary,  he  is  liable  irrespective  of  any 
question  of  care  or  negligence.^ 

Probably  the  use  of  the  fluid  terms  "  slight  care "  and 
"gross  negligence"  has  led  the  courts  to  attempt  to  qualify 
them  by  the  addition  of  the  more  specific  rules  given  above, 
and  therefore  not  one  alone,  but  all  of  the  above  rules  to- 
gether, must  be  accepted  as  containing  the  established  doc- 
trines ujjon  this  subject.  Reduced  to  equivalent  terms  they 
seem  to  mean  that  a  gratuitous  agent  must  use  as  much  care 
as  he  undertook  to  use,  and,  in  deciding  how  much  he  under- 
took to  use,  the  court  or  jury  may  consider:  (1)  how  much  he 
is  accustomed  to  use  in  his  own  like  affairs ;  (2)  how  much 
skill  he  actually  possesses;  (3)  how  much  skill  he  holds  him- 
self out  as  possessing;  (4)  how  hazardous  the  affair  is  in 
which  he  undertakes  to  act ;  (5)  whether  he  has  committed 
a  breach  of  the  terms  of  his  undertaking.^  In  short  the  gra- 
tuitous agent  must  observe  the  rules  of  obedience  and  good 
faith  and  must  exercise  such  prudence,  skill,  and  care  as  he 
has,  under  the  circumstances,  expressly  or  impliedly  under- 
taken to  use.*  "  Gross  negligence  in  such  cases  is  nothing 
more  than  a  failure  to  bestow  the  care  which  the  property  in 
its  situation  demands ;  the  omission  of  the  reasonable  care 
required  is  the  negligence  which  creates  the  liability ;  and 
whether -this  existed  is  a  question  of  fact  for  the  jury  to  deter- 
mine, or  by  the  court  where  a  jury  is  waived."^ 

It  is  clear,  then,  that  an  agent's  liability  for  negligence  does 
not  depend  upon  the  reward  he  is  to  receive,  nor  is  the  care 
he  is  required  to  use  proportioned  to  the  reward.  The  absence 
of  a  reward  has  merely  an  evidential  force  in  establishing  the 
nature  and  extent  of  the  care  which  he  is  bound  to  use,  and 

1  Philadelphia  &  Reading  R.  v.  Derby,  U  How.  (U.  S.)  -168. 
'  Jenkins  v.  Bacon,  111  Mass.  373;  Opie  i'.  Serrill,  6  W.  &  S.  (Pa.) 
261. 

3  Cases  mpra;  Beale,  5  Harv.  Law  Rev.  222. 

"^  Colyar  v.  Taylor,  1  Cold.  (Tenn.)  372. 

5  Mr.' Justice  Field  in  Preston  v.  Prather,  137  U.  S.  604,  608-609. 


124  TRINCirAL    AND    AGENT. 

even  for  tliis  purpose  it  is  of  slight  significance  when  the  snb- 
sidiary  rules  given  above  come  to  be  applied. 

§  98.     Gratuitous  bank   directors. 

The  question  of  gratuitous  agency  arises  frequent ly  in  the 
case  of  directors  of  corporations  who  serve  without  compen- 
sation, and  the  discussion  has  revolved  particularly  around 
the  question  as  to  the  liability  of  bank  directors  for  losses  oc- 
casioned through  their  alleged  negligence.  What  amount  of 
care  is  a  bank  director,  serving  without  compensation,  required 
to  exercise  in  the  management  of  the  affairs  of  the  bank  ? 
Several  answers  have  been  given  to  this  question.  A  very 
connnon  answer  is  that  he  is  liable  only  for  fraud  or  gross 
negligence  amounting  to  fraud. ^  Another  answer  is  that  he 
is  liable  for  the  want  of  that  care  and  prudence  "  that  men 
prompted  by  self-interest  generally  exercise  in  their  own 
affairs."  2  A  third  answer  is  that  he  is  liable  for  negligence 
(without  an  epithet)  and  that  negligence  consists  in  the  want 
of  care  according  to  the  circumstances;  that  the  circum- 
stances do  not  warrant  a  director  in  being  judged  by  the  stan- 
dard of  the  man  who  is  conducting  his  own  business,  but  by 
the  standard  of  the  ordinarily  prudent  bank  director  as  that 
is  fixed  by  experience  and  usage.^  The  last  answer  seems  the 
most  reasonable,  and  even  in  the  cases  in  which  "gross" 
negligence  is  made  the  measure  of  liability,  the  reasoning  re- 
sults in  the  adoption  of  this  standard.*  The  question  sometimes 

1  Swentzel  v.  Penn  Bank,  U7  Pa.  St.  140;  Bank  v.  Bossieux,  4  Hughes 
(U.  S.  C.  C),  387,  398,  3  Fed.  R.  817. 

2  Ilun  V.  Gary,  82  N.  Y.  65. 

3  Briggs  )'.  Spaulding,  141  U.  S.  132  (.•^emhle) ;  Delano  i".  Case,  121 
111.  247 ;  Williams  v.  McKay,  40  N.  J.  Eq.  189. 

*  See  Swentzel  v.  Penn  Bank,  supra,  where  the  court  says  that  the 
care  to  be  exercised  is  "ordinary  care."  "Not,  however,  the  ordinary 
care  which  a  man  takes  of  his  own  business,  but  the  ordinary  care  of  a 
bank  director  in  the  business  of  a  bank.  Negligence  is  the  want  of  care 
according  to  the  circumstances,  and  the  circumstances  are  everything  in 
considering  this  question.  The  ordinary  care  of  a  business  man  in  his 
own  affairs  means  one  thing  ;  the  ordinary  care  of  a  gratuitous  man- 
datory is  quite  another  matter.  The  one  implies  an  oversiglit  and  knowl- 
edge of  every  detail  of  his  business ;  the  other  suggests  such  care  only  as 


OBLIGATIONS   OF   AGKNT.  125 

turns  on  wlicther  the  duty  of  the  directors  is  to  the  stock- 
holders or  to  the  depositors,  it  being  urged  that  as  to  the  for- 
mer they  are  agents,  while  as  to  the  latter  they  are  trustees ;  ^ 
but  in  eitlicr  case  the  care  required  is  the  care  customarily 
given  by  such  gratuitous  agents,  that  is,  the  care  that  an  or- 
dinarily prudent  business  man  would  understand  that  he  had 
undei'takcn  to  exercise  under  similar  circumstances. 

a  man  can  give  in  a  short  space  of  time  to  the  business  of  other  persons, 
from  whom  he  receives  no  compensation."  Yet  after  this  excellent  state- 
ment the  court  holds  "  the  rule  to  be  that  directors,  /who  are  gratuitous 
mandatories,  are  only  liable  for  fraud,  or  for  such  gross  negligence  as 
amounts  to  fraud  !  " 

1  Hun  V.  Gary,  82  N.  Y.  65;  Williams  v.  McKay,  40  N.  J.  Eq.  189. 


PART   III. 

LEGAL  EFFECT  OF   THE   RELATION   AS   HETWEEN   THE 
PRINCU^AL   AND   THIRD   PARTIES. 

§  99.     Introduction. 

We  have  now  considered,  (1)  the  inauiier  in  which  the 
relation  of  principal  and  agent  may  be  formed,  and  (2) 
the  legal  effect  of  the  formation  of  the  relation  as  between 
the  principal  and  agent.  We  have  now  to  consider,  (3)  the 
legal  effect  of  the  execution  of  the  agency  as  between  the 
principal  and  third  persons  with  whom  the  agent  may  deal. 
The  main  object  of  agency  is  to  bring  the  principal  into 
contractual  relations  with  third  persons.  In  executing  the 
agency  the  agent  may  disclose  his  principal  or  he  may  not; 
he  may  make  admissions  or  declarations  affecting  the  ])rin- 
cipaFs  interests;  he  may  receive  notice  of  facts  affecting  the 
principal's  interests ;  or  he  may  be  guilty  of  fraud  or  other 
torts  affecting  such  interests.  Accordingly  we  have  now  to 
consider  each  of  these  possible  cases,  and  to  determine  the 
legal  consequences  of  each.  We  have,  in  addition,  to  con- 
sider the  liabilities  of  the  third  person  to  the  ])rincipal. 


CONTRACT   FOR   DISCLOSED   PRINCIPAL.  127 


CHAPTER  IX. 

CONTRACT   OF   AGENT   IN    BEHALF   OF   A    DISCLOSED    PRINCIPAL. 

1.    In  Agencies  generally. 

§  100.     General  considerations. 

The  normal  case  of  agency  is  that  in  which  the  agent  acts 
for  a  disclosed  principal,  in  whose  name,  and  in  whose  behalf 
he  enters  into  contracts  with  third  persons.  In  so  doing  the 
agent  may  (1)  act  within  the  scope  of  his  actual  authority, 
or  (2)  act  outside  of  the  scope  of  his  actual,  but  within  the 
scope  of  his  apparent  or  ostensible  authority,  or  (3)  act 
outside  of  the  scope  of  his  actual  or  his  ostensible  authority. 
The  legal  effect  of  the  contract  will  vary  in  accordance  with 
the  variance  in  these  three  particulars. 

Briefly  stated,  the  doctrine  is  that  the  principal  is  liable 
upon  all  contracts  made  by  his  agent  within  the  scope  of 
the  actual  authority ;  and  upon  all  contracts  made  by  his 
agent  within  the  scope  of  the  ostensible  or  apparent  author- 
ity,i  unless  the  third  person  has  notice  that  the  agent  is 
exceeding  his  authority.^  But  the  principal  is  not  liable 
upon  contracts  made  by  his  agent  beyond  the  scope  of  the 
actual  or  the  ostensible  authority.^ 

1  Trickett  v.  Tomlinsoii,  13  C.  B.  n.  s.  663;  Whitehead  r.  Tiickett,  15 
East,  400;  Fenn  v.  Harrison,  4  T.  R.  177;  Huntley  v.  Mathias,  90  N.  C. 
101;  Bentley  v.  Doggett,  51  Wis.  224;  Johnston  v.  Milwaukee,  &c.  Co., 
46  Neb.  480. 

2  Jordan  v.  Norton,  4  M.  &  W.  155;  CoUen  y.  Gardner,  21  Beav.  540; 
Strauss  v.  Francis,  L.  R.  1  Q.  B.  379 ;  Rust  v.  Eaton,  24  Fed.  R.  830. 

8  Stubbing  v.  Ileintz,  1  Peake,  66;  Fenn  v.  Harrison,  3  T.  R.  757; 
Batty  V.  Carswell,  2  Johns.  (N.  Y  )  48;  Martin  v.  Great  Falls  Mfg.  Co., 
9  N.  H.  51 ;  Graves  v.  Horton,  38  Minn.  66. 


128  PRINCirAL    AND   THIRD    PARTY. 

§  101.     Contracts  actually  authorized. 

It  is  olniuus  that  if  the  ju'liu'lpal  has  actually  authorized 
the  coutract  speeilically  or  generally,  that  he  will  be  bound 
by  it  in  the  same  manner  as  if  he  had  made  it  in  person. ^ 
The  agent  in  such  a  case  is  merely  an  inslrumentalily  which 
correctly  manifests  the  will  of  the  jji-incipal.  This  is  the 
object  of  the  agency  and  the  object  is  attained.  Every  con- 
sideration that  leads  to  the  enforcement  of  contracts  made 
in  person  calls  e(pially  for  the  enforcement  of  the  contract 
made  under  these  circumstances.  It  is  immaterial  by  what 
means  the  agent  derives  his  authority  so  long  as  it  is  suHi- 
cient.  It  may  spring  from  the  consent  of  the  princii)al  or 
from  the  necessities  of  the  situation.''^ 

§102.     Contracts  apparently  authorized:  estoppel. 

It  may  ha[)pen,  however,  that  the  princi])al  has  authoi'ized 
his  agent  to  make  a  contract  or  to  make  contracts,  but  has 
placed  certain  restrictions  or  limitations  upon  the  agent  as 
to  the  terms  of  the  transaction.  Tliese  restrictions  the  agent 
may  disregard.  In  such  a  case  the  will  of  the  j)rincipal  is 
not  correctly  manifested.  Is  he  nevertheless  bound  by  the 
contract  ? 

The  solution  of  this  prol)lem  de})ends  upon  a  consideration 
much  more  vital  than  the  interests  or  rights  of  the  principal. 
It  depends  upon  a  consideration  of  the  rights  of  the  public 
generally,  and  of  those  persons  specially  who  may  deal  with 
tlie  agent.  If  agency  is  to  be  admitted  as  a  means  of  trans- 
acting business,  it  is  essential  that  the  business  world 
should  be  able  to  deal  with  agents,  in  a  reasonable  and 
prudent  manner,  without  assuming  the  risk  that  the  agent 
may  turn  out  in  the  end  to  have  exceeded  his  actual  author- 
ity. This  consideration  leads  to  the  conclusion  that  where 
a  principal  has  vested  his  agent  with  apparent  authority 
to    make  a  certain   contract,   and   the   agent,  acting  within 

^  If  th(3  principal  could  not  lawfully  have  made  the  contract,  of  course 
the  agent  cannot  do  so  in  his  behalf.  Montreal  Assurance  Co.  v.  M'Gil- 
livray,  13  Moo.  P.  C.  C.  87. 

2  See  Chapters  II.  and  V.,  ante. 


CONTRACT   FOR   DISCLOSED   PRINCIPAL.  129 

the  scope  of  such  apparent  authority,  does  make  a  contract 
with  a  person  who  reasonably  believes  the  agent  to  possess 
the  authority  which  he  seems  to  possess,  the  principal  is 
bound  by  such  contract,  even  though  the  agent's  authority 
was  in  fact  limited  in  such  a  way  that  the  contract  was 
wholly  unauthorized.!  The  sole  inquiry  in  such  a  case  is 
whether  there  has  been  a  holding  out  of  the  agent  as  one 
having  authority  and  whether  the  third  person,  acting  with 
average  prudence  and  good  faith,  was  justified  in  believing 
that  the  agent  possessed  the  necessary  authority .^  If  so,  the 
principal  must  bear  the  risk,  because  he  has  held  out  the 
agent  as  possessing  the  authority  which  he  seems  to  possess, 
and  is  not  in  a  position  to  maintain  that  third  parties  should 
know  that  what  appears  to  be  true  is  not  true.  It  will  be 
observed  that  this  conclusion  is  based  upon  those  doctrines 
of  estoppel  considered  in  a  previous  chapter.^ 

§103.     Ostensible  authority.  —  Meaning. 

Ostensible  or  apparent  authority  vested  in  an  agent  may, 
when  exercised,  have  the  same  effect  in  imposing  con- 
tractual obligations  upon  his  principal  as  actual  authority. 
The  doctrine  has  been  clearly  and  satisfactorily  stated  in 
these  words  : 

"  Where  a  principal  has  by  his  voluntary  act  placed  an 
agent  in  such  a  situation  that  a  person  of  ordinary  prudence, 
conversant  with  business  usages  and  the  nature  of  the  par- 
ticular business,  is  justified  in  presuming  that  such  agent 
has  authority  to  perform  on  behalf  of  his  principal  a  par- 
ticular act,  such  particular  act  having  been  performed,  the 
principal  is  estopped,  as  against  such  innocent  tliird  person, 
from  denying  the  agent's  authority  to  perform  it."* 

In  order  to  establish  the  apparent  or  ostensible  authority 
of  the  agent,  therefore,  it  is  necessary  to  sliow  :   (1)  that  the 

1  Nickson  v.  Brohan,  10  Mod.  109 ;  Bailer  v.  Maples,  9  Wall.  (U.  S.) 
766;  Johnson  v.  Hurley,  115  Mo.  513. 

2  Spooner  v.  Browning,  1898,  1  Q.  B.  528. 

3  Ante,  §§  5,  51,  52. 

*  Irvine,  C,  in  Johnston  v.  Milwaukee  &  Wyoming  Investment  Co., 
46  Neb.  480,  490.     See  also  Pole  v.  Leask,  33  L.  J.  Ch.  162. 

9 


130  rUINCIPAL    AND    THIKD    I'ARTY. 

principal  liulil  out  the  agent  under  circumstances  from  which 
a  reasonably  prudent  man  might  infer  such  authority  ;  (2) 
that,  acting  prudently,  and  in  good  faith,  X  believed  the 
agent  to  possess  such  authority. 

(1)  Holdinu  out.  One  who  holds  out  another  as  his  agent 
cannot  deny  the  agency,  or  the  authority  that  reasunably 
attaches  to  it,  as  against  one  who  prudently  acts  npon  such 
ostensible  authority.^  What  constitutes  such  a  "holding 
out"  as  will  work  an  estoppel  in  favor  of  innocent  j^arties 
is  a  question  of  fact.  It  is  sometimes  said  that  where  the 
facts  are  undisputed  the  question  of  authority  is  one  of  law 
for  the  court; 2  but,  in  accordance  with  the  general  principles 
applicable  to  similar  questions,  it  would  seem  that  this  ques- 
tion is  for  the  court  when  the  facts  are  undisinited,  and  but 
one  inference  can  reasonably  be  drawn  from  the  facts,^  but 
that  if  the  facts  are  in  dispute,  or  if  reasonable  men  might 
differ  as  to  the  inferences  to  be  drawn  from  the  facts,  the 
doubt  should  be  resolved  by  the  jury.*  If  the  authority  be 
contained  in  a  writing  upon  which  X  relied,  or  ought  to 
have  relied,  its  interpretation  is  for  the  court  in  accordance 
with  the  general  rules  governing  written  instruments.^  An 
ambiguous  authority  is  construed  to  cover  any  act  that  may 
fall  within  any  fair  interpretation  of  it.^ 

The  apparent  scope  of  an  agent's  authority  is  such  authority 
as  a  reasonably  prudent  man,  in  like  circumstances  with  X 
and  with  like  means  of  knowledge  and  information,  would 
naturally  infer  the  agent  to  possess.  The  cases  are  numerous 
and  decisive  to  the  point,  that  the  third  person  may  prudently 
conclude  that  the  principal  intends  the  agent  to  exercise  those 

1  Pickering  v.  Busk,  1.5  East,  38;  Rimell  r.  Sampayo,  1  C.  &  P.  254; 
Jetley  v.  Hill,  1  C.  &  E.  2:59;  Daylight  Burner  Co.  v.  Odlin,  51  N.  II.  50; 
Johnson  v.  Hurley,  115  Mo.  513. 

2  (Julick  V.  Grover,  33  N.  J.  L.  4G3. 

8  Spooner  v.  Browning,  1808,  1  Q.  B.  528;  Franklin  Bank  Note  Co. 
V.  Mackev,  158  N.  Y.  140. 

4  Seiple  V.  Irwin,  30  Pa.  St.  513;  Huntley  v.  I\Iatbias,  90  X.  C.  lOl. 

<»  Savings  Fund  See.  v.  Savings  Bank,  36  Pa.  St.  498. 

8  Ireland  v.  Livingston,  L.  R.  5  II.  L.  395;  Very  v.  Levy,  13  How. 
(U.  S.)  345. 


CONTRACT   FOR  DISCLOSED   PRINCIPAL.  131 

powers  which  ordinarily  and  properly  belong  to  the  character 
in  which  the  principal  holds  the  agent  out  to  the  world. 
"  When  a  general  agent  transacts  the  business  entrusted  to 
him,  within  the  usual  and  ordinary  scope  of  such  business,  he 
acts  within  the  extent  of  his  authority  ;  and  the  principal  is 
bound,  provided  the  party  dealing  with  the  agent  acts  in  good 
faith,  and  is  not  guilty  of  negligence  which  proximately  con- 
tributes to  the  loss."  ^ 

(2)  Relying  upon  representation.  In  order  to  work  an 
estoppel  against  the  principal  based  upon  a  holding  out  of  the 
agent  as  possessed  of  authority,  it  is  necessary  that  the  third 
person  should  have  relied  in  good  faith  and  prudently  upon 
the  appearance  of  authority  thus  created.^  Thus  if  a  principal 
permits  an  agent  who  has  loaned  money  for  him  to  retain  the 
bond  and  mortgage,  he  vests  the  agent  with  apparent  authority 
to  receive  payment,  and  any  payment  made  by  the  mortgagor 
relying  upon  the  appearance  of  authority  thus  created  will 
bind  the  principal ;  but  if  the  mortgagor  makes  a  payment  to 
the  agent  after  the  latter  has  parted  with  possession  of  the 
documents,  with  or  without  the  knowledge  of  his  principal, 
such  payment  will  not  bind  the  principal,  because  the 
mortgagor  is  not  then  relying  upon  an  existing  a])pearance  of 
authorityw^  In  any  case  where  the  third  person  may  not 
prudently  infer  that  the  agent  possesses  the  powers  exercised, 
he  is  negligent,  and  it  is  his  own  negligence,  and  not  the 
conduct  of  the  principal,  that  is  the  proximate  cause  of  his 
loss.*  If  the  third  person  knows  the  limitation  upon  the 
agent's  authority,  he  does  not  iu  good  faith  rely  upon  any 
apparent  authority,  and  cannot  hold  the  principal.^     But  he 

1  Wheeler  v.  McGuire,  86  Ala.  402;  Butler  v.  Maples,  9  Wall.  (U.  S.) 
766;  Munn  v.  Commission  Co.,  15  Johns.  (N.  Y.)  44;  Hatch  v.  Taylor, 
10  N.  H.  538. 

2  Small  V.  Attwood,  1  Younge,  407 ;  Freeman  v.  Cooke,  2  Ex.  654 ; 
Proctor  n.  Bennis,  36  Ch.  Div.  740. 

"-■  '■''     .  .'*^£-S^^^is£j^?"*^w^W>  120  N.  Y.  274. 

'  4  llazeftine   v.  Miller,  44   Me.   177;   Gulick  v.   Grover,  33  N.  J.   L. 
463. 

6  CoUen  V.  Gardner,  21  Beav.  540;  Peabody  v.  Hoard,  46  111.  242. 


132  riUNClPAL    AND   THIRD   PARTY. 

is  not  bound  to  search  for  secret  limitations  upon  an  osten- 
sible authority.^ 

J;  104.      Same.  —  General  and  special  agents. 

It  is  oftrn  said  that  tlie  rules  as  above  stated  ai)])ly  to  a 
general  agency,  but  not  to  a  special  agency .^  "The  dis- 
tinction is  well  settled  between  a  general  and  a  special  agent. 
As  to  the  former,  the  principal  is  responsible  for  the  acts  of 
the  affent,  when  acting  within  the  general  scope  of  his  author- 
ity, and  the  public  cannot  be  supposed  connusant  of  any 
private  instructions  from  the  principal  to  the  agent;  but 
■where  the  agency  is  a  special  and  temporary  one,  there  the 
principal  is  not  bound  if  the  agent  exceeds  his  employment."  ^ 
"The  acts  of  the  former  bind  the  principal,  whether  in 
accordance  to  his  instructions  or  not;  those  of  the  latter  do 
not,  unless  strictly  within  his  authority."  *  "A  special  agent 
cannot  bind  his  principal  in  a  matter  beyond  or  outside  of  the 
power  conferred,  and  the  party  dealing  with  a  special  agent 
is  bound  to  know  the  extent  of  his  authority."  ^  And  many 
other  cases  use  language  to  the  same  effect. 

It  is  believed,  however,  that  these  statements  as  to  the 
distinction  between  general  and  special  agents  are  misleading. 
The  difference  between  a  general  agent  and  a  special  agent 
is  not  absolute  but  relative.  It  is  a  difference  in  degree  and 
not  in  kind.  In  either  case  the  principal  by  authorizing  the 
agent  to  do  a  particular  act  or  class  of  acts  vests  him  ostensibly 
with  authority  to  do  what  is  ordinarily  incidental  to  the 
execution  of  the  power.  In  either  case  the  burden  of  proof 
is  on  the  person  dealing  with  the  agent  to  show  that  the 
agent  had  the  authority,  real  or  ostensible,  which  he  assumed 
to  exercise.^     In  bearing  this  burden  the  proponent  may  pro- 

^  Byrne  i-.  Ma.s.sasoit  Packing  Co.,  137  ]\Ia.ss.  313;  Bentley  v.  Doggett, 
51  AVi.s.  224.     Compare  Baines  v.  Ewing,  4  H.  &  C.  511. 

2  For  definitions,  see  ante,  §  7;  Whitehead  v.  Tuckett,  15  East,  408  ; 
Fenn  v.  Harrison,  3  T.  R.  762. 

8  Mimn  r.  Commission  Co.,  15 -Tolms.  (N.  Y.)  44,  54. 

*  Rossiter  r.  Rossiter,  8  Wend.  (X.  Y.)  497. 

6  r,lack\vell  v.  Ketcham,  53  Ind.  186. 

'  Pole  V.  Leask,  33  L.  J.  N.  s.  Ch.  155. 


CONTRACT   FOR   DISCLOSED   PRINCIPAL.  133 

ceed  more  easily  in  the  case  of  an  agent  whose  incidental 
powers  are  naturally  or  necessarily  extensive,  than  in  the  case 
of  one  whose  incidental  powers  are  naturally  or  necessarily 
limited.  But  to  assert  that  in  the  one  case  the  third  person 
need  not  inquire  whether  what  appears  to  be  true  is  true, 
while  in  the  other  he  must  so  inquire,  is  to  set  an  artificial 
and  inconvenient  limit  to  the  operation  of  the  salutary  doc- 
trines of  estoppel.  The  most  that  can  justly  be  asserted  is 
that  the  third  person  should  know  that  an  agent,  not  acting 
in  the  ordinary  course  of  a  trade,  business,  or  profession,  and 
delegated  to  perform  a  siugle  act,  or  even  a  number  of  dis- 
connected particular  acts,  can  possess  but  a  very  narrow  limit 
of  incidental  authority  beyond  the  limits  of  the  real  or  actual 
authority.  There  is,  therefore,  little  to  rely  upon  except  the 
actual  authority.  But  as  to  that  little  (and  it  varies  in  degree, 
even  as  in  agencies  of  wider  scope)  the  third  person  may  rely 
upon  it  as  safely  as  upon  the  larger  incidental  powers  flowing 
from  a  general  agency.  In  neither  case  will  any  private 
instructions  to  the  agent,  intended  to  limit  the  ostensible 
authority,  be  effective  as  against  one  who  deals  with  the  agent 
in  ignorance  of  such  instructions.^ 

"  Whether,  therefore,  an  agency  is  general  or  special  is 
wholly  independent  of  the  question  whether  the  power  to  act 
within  the  scope  of  the  authority  given  is  unrestricted,  or 
whether  it  is  restrained  by  instructions  or  conditions  imposed 
by  the  principal  relative  to  the  mode  of  its  exercise."  ^ 
"  Where  private  instructions  are  given  to  a  special  agent, 
respecting  the  mode  and  manner  of  executing  his  agency, 
intended  to  be  kept  secret,  and  not  communicated  to  those 
with  whom  he  may  deal,  such  instructions  are  not  to  be 
regarded  as  limitations  upon  his  authority ;  and  notwith- 
standing he  disregards  them,  his  act,  if  otherwise  within  the 
scope  of  his  agency,  will  be  valid,  and  bind  his  employer.  .  .  . 

1  Hatch  V.  Taylor,  10  N.  H.  538;  Bryant  v.  Moore,  26  Me.  84;  Towle 
V.  Leavitt,  23  N.  H.  360;  Byrne  v.  Massasoit  Packing  Co.,  137  Mass. 
313 ;  Wilson  v.  Beardsley,  20  Neb.  449.  Cf.  Baines  v.  Ewing,  4  H.  &  C. 
511.  .      . 

2  Butler  V.  Maples,  9  Wall.  (U.  S.)  766,  774.  A  j'^  ^^\  Q^^'^Jj-j,   %,T 


134  rRINCIPAL   AND   THIRD    PARTY. 

No  man  is  at  liberty  to  send  another  into  the  market,  to  buy 
or  sell  for  him,  as  his  agent,  with  secret  instructions  as  to 
the  manner  in  which  he  shall  execute  his  agency,  which  are 
not  to  be  communicated  to  those  with  whom  he  is  to  deal ; 
and  then,  when  his  agent  has  deviated  from  those  instruc- 
tions, to  say  that  he  was  a  special  agent  —  that  the  instruc- 
tions were  limitations  upon  his  autliority  —  and  that  those 
with  whom  he  dealt,  in  the  matter  of  his  agency,  acted  at 
their  peril,  because  they  were  bound  to  inquire,  where  inquiry 
would  have  been  fruitless,  and  to  ascertain  that,  of  which 
they  were  not  to  have  knowledge."  ^  This  doctrine  })laces 
special  agencies  upon  the  same  footing  as  general  agencies ; 
each  is  to  be  measured  by  the  appearance  of  authority  upon 
which  reasonably  {)rudcnt  men  may  rely.  "  The  rule  is,  that 
if  a  special  agent  exercise  the  power  exhibited  to  the  public 
the  principal  will  be  bound,  even  if  the  agent  has  received 
private  instructions  which  limit  his  special  authority."  ^ 

§  105.     Same.  —  Public  agents. 

"  Different  rules  prevail  in  respect  to  the  acts  and  declara- 
tions of  public  agents  from  those  whicli  ordinarily  govern  in 
the  case  of  mere  private  agents.  Principals,  in  the  latter 
category,  are  in  many  cases  bound  by  the  acts  and  declara- 
tions of  their  agents,  even  where  the  act  or  declaration  was 
done  or  made  without  any  authority,  if  it  appear  that  the  act 
was  done  or  declaration  was  made  by  the  agent  in  the  course 
of  his  regular  em{)loyment;  but  the  government  or  ))ublic 
authority  is  not  bound  in  such  a  case,  unless  it  manifestly 
appears  that  the  agent  was  acting  within  the  scope  of  his 
authority,  or  that  he  had  been  held  out  as  having  authority 
to  do  the  act,  or  was  emjjloyed  in  his  capacity  as  a  public 
agent  to  do  the  act  or  make  the  declaration  for  the  govern- 
ment. .  .  .  Although  a  private  agent,  acting  in  violation  of 
specific  instructions,  yet  within  the  scope  of  his  general 
authority,  may  bind  his  principal,  the  rule  as  to  the  effect  of 

1  Ilatcli  r.  Taylor,  10  N.  II.  538,  548. 

2  Howell  V.  Graff,  25  Nel).  130;  Byrne  v.  INIassasoit  Packing  Co.,  137 
Mass.  313.     See  Ewart  on  Estoppel,  vp.  474-483. 


CONTRACT   FOR   DISCLOSED    PRINCIPAL.  135 

the  like  act  of  a  public  agent  is  otherwise,  for  the  reason  that 
it  is  better  that  an  individual  should  occasionally  suffer  fi-om 
the  mistakes  of  public  officers  or  agents,  than  to  adopt  a  rule 
which,  through  improper  combinations  or  collusion,  might  be 
turned  to  tiie  detriment  and  injury  of  the  public."  ^ 

§106.     Same.  —  Elements  of  authority. 

Several  elements  combine  to  make  up  what  is  termed  the 
apparent  scope  of  the  agent's  authority,  or  that  appearance  of 
authority  upon  which  the  public  may  rely.  These  ai*e  (1)  the 
powers  actually  conferred ;  (2)  the  powers  necessarily  or 
reasonably  incidental  to  those  actually  conferred ;  (3)  the 
powers  annexed  by  custom  or  usage  to  those  actually  con- 
ferred ;  (4)  the  powers  which  the  principal  has  by  his  con- 
duct led  third  persons  reasonably  to  believe  that  his  agent 
possesses.^ 

(1)  Powers  actually  conferred.  —  The  principal  is,  of  course, 
bound  by  what  he  expressly  authorizes.  On  the  other  hand, 
he  is  bound  by  no  more  than  he  actually  authorizes  in  cases 
where  the  third  party  knows  the  exact  terms  of  the  authority. 
This  is  especially  true  of  authority  conferred  in  a  formal 
power  of  attorney.  Such  powers  of  attorney  are  construed 
as  giving  only  the  authority  actually  expressed  ^  and  such 
medium  lowers  as  are  necessary  for  the  effective  execution 
of  those  so  expressed.*  "  It  is  as  fundamental  as  it  is  ele- 
mentary in  the  law  of  agency  that  a  formal  instrument  con- 
ferring authority  will  be  construed  strictly,  and  can  be  held 
to  include  only  those  powers  which  are  expressly  given,  and 
those  which  are  necessary  and  essential  to  carry  into  effect 
those  which  are  expressed."  °     Thus  it  has  been  held  that  a 

1  Whiteside  v.  United  States,  93  U.  S.  247,  256-257,  citing  Story  on 
Agency,  §  307 «;  Lee  v.  Munroe,  7  Cranch  (U.  S.),  366;  Mayor  v.  Esch- 
bach,  18  Md.  270,  282.  As  to  liability  of  public  agent  for  his  own  acts, 
seejoos/,  §  203. 

2  Huntley  v.  Mathias,  90  X.  C.  101. 

3  Bryant  v.  Bank,  1893,  App.  Cas.  170;  Lewis  v.  Ramsdale,  55  L.  T.  R. 
179  ;  Gilbert  v.  How,  45  Minn.  121;  Craighead  v.  Peterson,  72  X.  Y.  279. 

4  Howard  v.  Baillie,  2  H.  Bl.  618;  Le  Roy  v.  Beard,  8  How.  (U.  S.) 
451 ;  Peck  v.  Harriott,  6  S.  &  R.  (Pa.)  146. 

6  Harris  v.  Johnston,  54  Minn.  182;  Penfold  v.  Warner,  96  Mich.  179. 


136  PKiNarAL  and  tiiikd  takty. 

j.owcr  of  attorney  to  an  agent  to  sell  all  lands  owned  by  the 
donor  of  the  power  in  a  certain  county  would  not  be  construed 
to  cover  lands  purehast-d  by  the  donor  subsctpient  to  the 
execution  of  the  power.i  But  this  has  been  criticised  as  too 
strict  a  construction.-  In  general  tiie  formal  instrument  is 
construed  strictly  as  to  its  terms  and  is  not  to  be  extended  to 
the  authorization  of  acts  beyond  those  specified,  and  to  those 
onlv  whi'U  done  in  the  i)rincipars  business  and  for  his  benefit.^ 
Where  the  instrunu-nt  is  capable  of  two  interpretations,  and 
the  agent  and  third  party  deal  in  the  light  of  one  of  them  in 
good  faith,  the  princii)al  is  Ijound  even  though  he  intended  it 
to  mean  otherwise.^  F>ut  where  the  [mwer  hxes  a  limit  to  the 
agent's  transactions  for  his  principal,  and  the  agent  represents 
that  he  has  not  yet  exceeded  the  limit,  it  seems  the  principal 
is  not  responsible  for  the  veracity  and  accuracy  of  the  agent's 
statements.^ 

Where  the  authority  is  contained  in  an  instrument  not 
under  seal,  or  is  conferred  orally,  the  authority  is  construed 
more  liberally,  that  is,  while  evidence  of  usage  or  attendant 
circumstances  may  not  be  allowable  to  vary  an  authority 
under  scal,^  such  evidence  may  be  received  to  extend  an 
authority  not  under  seal.' 

Notice  of  the  actual  limits  of  an  agent's  powers  j)revcnts 
the  one  having  such  notice  from  claiming  to  rely  upon  osten- 
sible authority.     Thus   by  statute  a  signature   by  "  procura- 

^  Peiifold  V.  Warner,  supra ;  Weare  v.  Wilhains,  S.l  Iowa,  '2oS. 

2  ;j5  Am.  St.  Rep.  593,  citing  Fay  v.  Wiuchester,  4  Met.  (Mass.)  .513; 
Bigelow  i:  Livingston,  28  Minn.  57. 

3  Attwood  i:  Mannings,  7  B.  &  C.  278;  Craighead  r.  Peterson,  72 
N.  Y.  279;  Camden,  &c.  Co.  v.  Abbott,  41  X.  J.  L.  2."i7.  But  see  North 
River  Bank  v.  Ayniar,  3  Hill  (X.  Y.),  2G2. 

*  Ireland  v.  Livingston,  L.  R.  5  II.  L.  395  ;  Minnesota,  &c.  Co.  v. 
Monta'iue,  65  Iowa,  67. 

■^  Haines  c.  Ewing,  4  II.  &  C.  511 ;  Mussey  v.  Beecher,  3  Cush.  (Mass.) 
511.     See  pout,  §§  151-157. 

«  Hogg  r.  Snaith,  1  Taunt.  317;  Delafield  v.  Illinois,  26  Wend. 
(N.Y.)  192.  Such  evidence  may  be  used  to  interpret  the  instrument. 
Reese  v.  Medlock,  27  Tex.  120;  Frink  v.  Roe,  70  Cal.  29G. 

"  Pole  r.  Leask,  28  Beav.  562;  Entwisle  r.  Dent,  1  Ex.  812;  Piiillips 
V.  Moir,  69  111.  155;  Lyon  v.  Pollock,  99  U.  S.  668. 


CONTRACT   FOR   DISCLOSED    PRINCIPAL.  137 

tioii "  operates  as  notice  that  the  agent  has  but  a  limited 
authority  to  sign  negotiable  instruments,  and  the  principal  is 
bound  only  in  case  the  agent  in  so  signing  acted  within  the 
actual  limits  of  his  authority.^ 

(2)  Powers  incidental  to  those  conferred. — The  implied 
authority  of  the  agent  includes  the  power  to  use  all  means 
reasonably  necessary  to  the  accomplishment  of  the  object  of 
the  agency. 2  What  means  are  thus  reasonably  necessary, 
seems  to  be  a  mixed  question  of  law  and  fact.  "  Sometimes 
the  powers  are  determined  by  mere  inference  of  law;  in  other 
cases  by  matters  of  fact ;  in  others  by  inference  of  fact ;  and 
in  others  still,  to  determine  them  becomes  a  question  of  mixed 
law  and  fact."  ^  The  nature  and  extent  of  such  incidental 
powers  are  varied  and  beyond  the  province  of  this  work  to 
enumerate  in  detail.  A  few  illustrations  must  suffice.  An 
agent  employed  to  travel  and  sell  goods  has  the  implied  power 
to  hire  a  horse  for  such  purpose."^  And  the  principal  is  liable 
for  the  horse  hire  even  though  he  has  furnished  the  agent 
with  money  to  pay  for  it,  and  has  forbidden  the  agent  to  hire 
it  on  credit.^  But  the  manager  of  a  hotel  has  no  implied 
authority  to  hire  horses  for  the  use  of  guests  and  render  the 
principal  liable  for  their  safe-keeping  and  return.^  An  agent 
authorized  to  sell  goods  has  implied  power  to  warrant  the 
goods  in  such  manner  as  is  usual  in  such  sales,  but  not  the 
power  to  give  an  unusual  warranty.'''  And  the  weight  of 
authority  is  now  in  favor  of  the   proposition  that  an  agent 

1  Negotiable  Instruments  Law,  §  21  (N.  Y.  §  40)  ;  English  Bills  of  Ex- 
change Act,  §  2.5;  Stagg  v.  Elliott,  12  C.  B.  x.  s.  373;  The  Floyd  Ac- 
ceptances, 7  Wall.  (U.  S.)  666;  Nixon  r.  Palmer,  8  N.  Y.  398. 

2  Pole  V.  Leask,  28  Beav.  562;  Beaufort  v.  Neeld,  12  C.  &  F.  248; 
Durrell  v.  Evans,  1  H.  &  C.  174  ;  Mullens  v.  Miller,  22  Ch.  Div.  194  ; 
Wheeler  v.  McGuire,  86  Ala.  398;  Bentley  v.  Doggett,  51  Wis.  224. 

3  Huntley  v.  Mathias,  90  N.  C.  101,  104. 
*  Huntley  v.  INIathias,  supra. 

^  Bentley  v.  Doggett,  supra. 

6  Brockway  v.  Mullin,  46  N.  J.  L.  448.  See  also  Wallis  Tobacco  Co. 
V.  Jackson,  99  Ala.  460. 

T  Benj.  on  Sales  (Bennett's  ed.  1892),  §  624,  and  notes  pp.  629-630; 
cases  cited  post,  §  107;  Upton  v.  Suffolk  County  Mills,  11  Cush.  (Mass.) 
586. 


138  PKINCIPAL    AND    THIRD    PAItTV. 

autliorized  to  sell  and  convey  real  property  may,  nnlcss 
specially  restricted,  sell  and  convey  with  general  warranty .^ 
An  agent  authorized  to  sell  goods  has  implied  power  to 
receive  payment  for  the  goods  provided  he  has  ])Ossession 
of  them,  and  is  authorized  to  deliver;  but  ii"  he  has  not 
possession  there  is  no  implied  authority  to  receive  payment.^ 
An  agent  has  implied  power  to  borrow  money  only  where  the 
transaction  of  the  business  confided  to  him  absolutely  requires 
the  exercise  of  the  power  in  order  to  carry  it  on ;  it  will  not 
be  implied  merely  because  its  exercise  would  be  convenient 
or  advantageous.^  Some  agents  have,  however,  a  customary 
power  to  borrow  money,  as  cashiers  of  banks'*  and  masters  of 
ships,^  The  power  to  make  or  indorse  negotiable  paper  will 
not  ordinarily  be  inferred,  or  regarded  as  incidental  to  other 
powers.^ 

(3)  Powers  annexed  hy  custom.  Custom  or  usage  may 
aid  materially  in  determining  the  authority  of  an  agent. 
An  agent  may  be  one  who  follows  an  established  or  recog- 
nized trade,  })rofession,  or  business,  or  he  may  be  one  not 
following  such  a  recognized  or  customary  business.  Where 
a  principal  appoints  an  agent  who  is  customarily  governed 
by  established  usages,  it  is  presumed  that  he  intends  such 
usages    to    govern    the    agent   in    the    transaction    in    ques- 

1  Le  Roy  v.  Beard,  S  How.  (U.  S.)  451  ;  Schultz  v.  Grillin,  121  N.  Y. 
291. 

••2  Iliggins  V.  Moore,  34  N.  Y.  417;  Butler  r.  Dorman,  68  Mo.  298; 
Seiple  r.  Irwin,  30  Pa.  St.  513. 

8  Bickford  v.  Meiiier,  107  N.  Y.  490;  Consolidated  Nat.  Bk.  v.  Pacific, 
&c.  Co.,  95  Cal.  1;  Heath  c  Paul,  81  Wis.  532;  Bryant  v.  Bank,  1893, 
App.  Cas.  170. 

*  Crain  v.  First  N.  B.,  114  111.  510;  Barnes  v.  Ontario  Bk.,  19  X.  Y. 
152. 

*  The  power  of  masters  of  ships  to  borrow  money  rests  strictly  on 
imperative  nece.ssity,  which,  it  seems,  must  be  shown  to  exist  in  order  to 
charge  the  principal.  McCready  v.  Thorn,  51  N.  Y.  454;  Stearns  v.  Doe, 
12  (iray  (Mass.),  482.     Cf.  Arey  v.  Hall,  81  Me.  17.     Post,  §  116. 

G  Abel  r.  Sutton,  3  E.-^p.  108;  Kilgour  v.  Finlyson,  1  H.  Bl.  155; 
Burmester  v.  Norris,  6  Ex.796;  In  re  Cunningham,  36  Ch.  Div.  532; 
New  York  Iron  Mine  v.  First  N.  B.,  39  Mich.  644;  Jackson  v.  Nat.  Bk., 
92  Tenn.  154.     Cf.  Edmunds  v.  Bushell,  L.  11.  1  Q.  B.  97. 


CONTRACT   FOR   DISCLOSED   PRINCIPAL.  139 

tion.^  It  is  upon  this  consideration  that  the  courts  reach  the 
conclusion  that  a  bank  cashier  has  power  to  borrow  money  ;2 
or  a  factor  or  broker  to  sell  on  credit ;  ^  or  an  attorney  to  con- 
trol the  procedure  of  an  action  at  law.*  Where  the  principal 
appoints  an  agent  who  does  not  follow  a  customary  calling, 
such  agent,  in  the  carrying  out  of  the  objects  of  the  agency, 
has  implied  authority  to  deal  according  to  the  usages  of  the 
particular  business  confided  to  him,  or  of  the  particular  place 
in  which  the  business  is  to  be  done.^  This  doctrine  as  to 
custom  is  well  illustrated  in  the  case  of  stock-brokers  who 
buy  and  sell  stock  on  margins,  or  otherwise,  in  behalf  of 
customers.  The  customer  is  bound  by  the  customs  of  the 
market  in  which  he  deals,  and  if  the  custom  permits  the 
broker  to  repledge  the  stock  for  his  own  debt,  the  princi- 
pal will  be  bouud  by  the  custom.^  The  doctrine  finds  a 
further  illustration  in  the  much  mooted  question  as  to  the 
power  of  an  agent  to  warrant  goods  sold  for  his  principal.^ 
The  usage  must  be  reasonable,  not  contrary  to  positive  law, 
well-established,  and  publicly  known  ;S  or  if  it  be  not  gen- 
eral it  must  be  known  to  the  principal.^  Even  when  a 
usage  fulfils  all  necessary  conditions  it  will  not  prevail-  as 
against  positive  instructions  given  to  the  agent.^''     It  is  nec- 

1  Young  V.  Cole,  3  Bmg.  N.  C.  724 ;  Howard  v.  Sheward,  L.  R.  2  C.  P. 
148;  Hibbard  v.  Peek,  75  Wis.  619;  Adams  v.  Ins.  Co.,  95  Pa.  St.  348. 

2  Crain  v.  First  N.  B.,  114  111.  516. 

3  Boorman  v.  Brown,  3  Q.  B.  511;  Pinkham  v.  Crocker,  77  Me.  563; 
Daylight  Burner  Co.  v.  Odlin,  51  N.  H.  56. 

"  Strauss  v.  Francis,  L.  R.  1  Q.  B.  379;  Moulton  v.  Bowker,  115 
Mass.  36. 

5  Dingle  v.  Hare,  7  C.  B.  n.  s.  145;  Pelliam  v.  Hilder,  1  Y.  &  Coll. 
C.  C.  3;  Pollock  v.  Stables,  12  Q.  B.  765;  Pickert  v.  Marston,  68  Wis. 
465. 

6  Skiff  V.  Stoddard,  63  Conn.  198. 

T  Post,  §  107;  Brady  v.  Todd,  9  C.  B.  N.  s.  592;  Howard  v.  Sheward, 
L.  R.  2  C.  P.  148 ;  Brooks  v.  Hassall,  49  L.  T.  R.  569. 

8  Sweeting  v.  Pearce,  7  C.  B.  n.  s.  449 ;  United  States  v.  Buchanan, 
8  How.  (U.  S.)  83;  Jackson  v.  Bank,  92  Tenn.  154;  Hibbard  v.  Peek, 
75  Wis.  619. 

9  Walls  V.  Bailey,"  49  N.  Y.  464 ;  Robinson  v.  Mollett,  L.  R.  7  H.  L. 
802. 

"  Day  V.  Holmes,  103  Mass.  306. 


140  PRINCIPAL    AND    TIIIRU    TAKTY. 

cssai'y  ill  all  cases  to  distiiij^uish  between  regulations  or 
customs  intended  to  govern  a  particular  body  of  dealers  (as 
stock-brokers)  in  their  relations  to  each  other,  and  regula- 
tious  or  customs  intended  to  bind  outsiders.  An  outsider 
is  bound  only  so  far  as  (he  rules  or  customs  are  clearly 
intruded  to  aj)|)ly  to  outsiders.^  In  some  cases  the  court 
will  take  judicial  notice  of  the  existence  of  the  custom,^  but 
generally  it  is  a  matter  of  proof.  If  sought  to  be  established 
by  proof,  it  must  be  shown  to  be  so  prevailing  that  parties 
may  be  presumed  to  contract  with  reference  to  it.^ 

(4)  Powers  inferred  from  co)iduct  of  principal.  The  con- 
duct of  the  j)rincij)al  may  be  such  as  to  lead  to  a  reasonable 
inference  that  the  agent  has  certain  powers,  and  if  so  the 
principal  will  be  estopped  to  deny  the  existence  of  such 
powers.  "  If  a  man,  whatever  his  real  meaning  may  be,  so 
conducts  himself  that  a  reasonable  man  would  take  his  eon- 
duct  to  mean  a  certain  representation  of  facts,  and  that  it 
was  a  true  representation,  and  that  the  latter  was  intended 
to  act  upon  it  in  a  particular  way,  and  he,  with  such  belief, 
does  act  in  that  way  to  his  damage,  the  first  is  estopped 
from  denying  that  the  facts  were  as  represented."  *  The 
doctrine  is  the  general  doctrine  of  estoppel  and  calls  for 
no  special  consideration  in  this  place.^ 

§  107.     Apparent  scope  of  authority.  —  Illustrations. 

(1)  Agent  authorized  to  sell.  An  agent  authorized  to  sell 
possesses  impliedly  or  by  custom  the  following  authority  : 
(a)  to  receive  payment  if  the  agent  has  possession  of  the 
goods  but  not  otherwise ;'' (/>)  to  fix  the  terms  of  the  sale 

1  Levitt  r.  Hamblet,  1901,  1  K.  B.  53. 

2  Ahum  V.  Goodspeed,  72  N.  Y.  108;  T:ilniage  v.  Bierhause,  103  Ind. 
270. 

8  Herring  v.  Skaggs,  62  Ala.  180,  s.  c  73  Ala.  440. 

*  Carr  v.  Ky.  Co.,  L.  11.  10  C  P.  307,  317;  Austrian  c.  Springer,  04 
Mich.  343. 

6  See  ante,  §§  51,  52,  103;  Smith  v.  Clews,  105  N.  Y.  283;  Levi  v. 
Booth,  58  IMd.  305;  Johnson  v.  Hurley,  115  Mo.  513;  Smith  v.  ]\IcGuire, 
3  H.  &  N.  554. 

•  Higgius  V.  Moore,  34  N.  Y.  417;   Butler  v.  Dorman,  68  Mo.  298; 


CONTRACT   FOR   DISCLOSED    PRINCIPAL.  141 

SO  far  as  reasonably  within  the  customs  of  such  agencies 
and  sales  ;^  («?)  to  warrant  the  quality  of  the  goods  sold  if 
such  goods  are  customarily  sold  with  such  a  warranty  by 
agents  of  like  kind,^  but  not  if  the  article  be  not  usually 
sold  with  a  warranty,^  or  with  a  warranty  like  the  one  in 
question,^  or  if  the  agent  be  one  not  usually  authorized  to 
warrant.^  He  has  no  implied  authority  to  sell  at  auction;^ 
to  exchange  the  goods  by  way  of  barter  with  a  third  person  ;7 
to  sell  on  credit^  unless  clearly  justified  by  custom,  as  in  the 
case  of  factors;  to  pledge  or  mortgage  the  goods  ;^  or,  after 
a  sale  is  once  made,  to  rescind  the  contract  or  modify  its 
terms.i*'  These  rules  apply,  in  the  main,  to  agents  author- 
ized to  sell  realty  as  well  as  to  those  authorized  to  sell 
personalty.^^ 

(2)  Agent  authorized  to  ijurchase.  An  authority  to  pur- 
chase is  construed  somewhat  more  strictly  than  an  authority 
to  sell.     Except  where  "  it  is  the  custom  of  tiie  trade  to  buy 

Law  V.  Stokes,  32  X.  J.  L.  249.  Payment  must  be  in  money,  not  in 
checks  or  other  negotiable  instruments.  Harlan  v.  Ely,  68  Cal.  522 ; 
Brown  v.  Smith,  67  N.  C.  245;  Buckwalter  v.  Craig,  55  Mo.  71. 

1  Putnam  v.  French,  53  Vt.  402;  Daylight  Burner  Co.  v.  Odlin,  51 
N.  H.  56. 

2  Dingle  i>.  Hare,  7  C.  B.  n.  s.  145;  Ahern  v.  Goodspeed,  72  N.  Y. 
108 ;  Pickert  v.  Marston,  68  Wis.  465. 

8  Smith  V.  Tracy,  36  N.  Y.  79  ;  Argersinger  v.  Macnaughton,  114 
N.  Y.  535;  Herring  v.  Skaggs,  62  Ala.  180,  s.  c.  73  Ala.  446. 

4  Wait  V.  Borne,  123  N.  Y.  592;  Upton  v.  Suffolk  County  Mills,  11 
Cush.  (Mass.)  586  ;  Palmer  v.  Hatch,  46  Mo.  585  ;  Brady  v.  Todd,  9  C.  B. 
N.  s.  592. 

8  Payne  v.  Leconlield,  51  L.  J.  Q.  B.  642;  Cooley  v.  Perrine,  41 
N.  J.  L.  322,  s.  c.  42  X.  J.  L.  623;  Dodd  v.  Farlow,  11  Allen  (]\Iass.), 
426. 

6  Towle  V.  Leavitt,  23  N.  H.  360. 

7  Taylor  ;•.  Starkey,  59  N.  H.  142;  Guerreiro  v.  Peile,  3  B.  &  A.  G16. 

8  Wiltshire  v.  Sims,  1  Camp.  258;  Payne  v.  Potter,  9  Iowa,  519. 

9  Wheeler,  &c.  Co.  v.  Givan,  65  Mo.  89;  Warner  v.  Martin,  11  How. 
(U.  S.)  209;  Frink  v.  Roe,  70  Cal.  296;  Rodick  y.  Coburn,  68  Me.  170. 
For  statutory  provisions  under  Factors'  Acts,  see  post,  §  171. 

10  Nelson  v.  Aldridge,  2  Stark.  435;  Diversy  v.  Kellogg,  44  111.  114,- 
Smith  V.  Rice,  1  Bailey  (S.  C),  648 ;  cf.  Young  v.  Cole,  3  Bing.  N.  C.  724. 

11  Le  Roy  v.  Beard,  8  How.  (U.  S.)  451;  Schultz  v.  Griffin,  121  N.  Y. 
294;  Peters  v.  Farnsworth,  15  Vt.  155. 


142  PRINCIPAL    AND    TllIKD    rAUTY. 

Oil  credit,"  "the  law  does  not  raise  any  presuni[ttion  that 
such  agent  may  bind  his  principal  l)y  a  purcliase  on  credit, 
but  the  contrary."  ^  This,  of  course,  where  the  agent  is 
supplied  with  funds;  if  he  be  not  supj)lied  with  funds,  the 
direction  to  buy  will  imply  the  authority  to  buy  on  credit.^ 
He  can  buy  neither  more,  nor  less,  nor  any  diiferent  kind 
of  goods,  than  his  instructions  specify,^  or  than  third  persons 
may  reasonably  infer  that  he  has  authority  to  contract  foi-.'* 
He  may  be  presumed  to  have  such  powers  as  are  reasonaljly 
incidental  to  the  transaction,  as,  to  fix  the  terms,  and,  if 
authorized  to  purchase  on  credit,  to  make  the  necessary 
representations  as  to  the  solvency  of  the  principal.^ 

(3)  Agent  authorized  to  manage  a  business.  Where  an 
entire  business  is  placed  under  the  management  of  an  agent, 
the  authority  of  the  agent  may  be  presumed  to  be  com- 
mensurate with  the  necessities  of  his  situation.^  He  is  to 
conduct  the  business  as  it  is,  buying  and  selling,  hiring 
workmen  or  agents,  and  otherwise  acting  as  a  prudent  man 
would  in  the  conduct  of  a  like  enterprise.  He  has  implied 
authority  to  do  whatever  is  ordinarily  incidental  to  the  con- 
duct of  such  a  bnsiness,  whatever  is  necessary  to  the  effec- 
tive execution  of  his  duties,  or  whatever  is  customary  in 
a  particular  traded  For  all  contracts  made  within  these 
limits  the  principal  is  liable ;  but  not  for  contracts  outside 
of  these  limits.  Thus  the  manager  of  a  hotel  may  bind  his 
principal  for  the  necessary  supplies  of   the  house,®  but  not 

1  Komorowski  ;;.  Krumdick,  56  Wis.  23;  AVheeler  v.  McGuire,  80  Ala. 
398;  Berry  v.  Barnes,  23  Ark.  411. 

2  Si)rague  v.  Gillett,  9  Met.  (Mass.)  91. 

3  Olyphaiit  r.  .McNair,  41  Barb.  (N.Y.)  446. 

4  Butler  V.  Maples,  9  Wall.  (U.  S.)  7G6. 

6  Bay  ley  c.  Wilkins,  7  C.  B.  886;  Wishard  v.  McXeill,  85  Towa,  474; 
Watteau  v.  Fenwick,  1893,  1  Q.  B.  346;  Hubbard  v.  Teiibrook,  121  Pa. 
St.  291. 

^  Quoted  with  approval  in  Lowenstein  v.  Lombard,  164  N.  Y.  324,  329. 

7  Edmunds  v.  Bushell,  L.  R.  1  Q.  B.  97;  Jones  v.  Phipps,  L.  R.  3  Q.  B. 
567;  Collins  v.  Cooper,  65  Tex.  460;  German  Fire  Ins.  Co.  v.  Grunett, 
112  111.  G8. 

*  Beecher  v.  Venn,  35  Mich.  4GG. 


CONTRACT   FOR   DISCLOSED   PRINCIPAL.  143 

for  those  tliat  are  not  shown  to  be  necessary.^  A  manager 
of  a  shop  has  authority  to  buy  the  goods  necessary  to  keep 
it  in  running  order.^  But  there  is  ordinarily  no  implied 
authority  to  make  negotiable  paper  ;^  nor  to  borrow  money 
except  where  the  power  is  absolutely  indispensable;*  nor  to 
sell  the  entire  business,^  nor  to  pledge  or  mortgage  it,^  nor 
to  use  his  principal's  goods  for  payment  of  his  own  debts." 

(4)  Insurance  agents.  An  insurance  agent,  whether  called 
"general"  or  "local,"  —  that  is,  whether  his  authority  is 
exercised  over  a  wide  or  a,  narrow  territory,  —  is,  within  such 
prescribed  territory,  the  general  representative  of  his  com- 
pany, and  the  law  applicable  to  him  is,  broadly  speaking, 
the  same  as  that  applicable  to  a  general  agent.^  If  author- 
ized to  solicit  and  accept  risks,  or  issue  and  renew  policies, 
he  is  a  general  agent,  and  has  ostensibly  all  the  powers 
incidental  to  such  an  agency  or  customary  in  it.^  Within 
the  scope  of  such  ostensible  authority,  the  agent  may  bind 
his  principal,  although  he  acts  contrary  to  special  instruc- 
tions.i^     Third   persons  are    not  affected    in   their   dealings 

1  Wallis  Tobacco  Co.  v.  Jackson,  99  Ala.  460 ;  Brockway  v.  Mullin, 
46  "N.  J.  L.  448;  cf.  Cummings  v.  Sargent,  9  Met.  (Mass.)  172. 

2  Wattean  v.  Fenwick,  supra ;  Hubbard  v.  Tenbrook,  supra ;  Banner 
Tobacco  Co.  v.  Jenison,  48  Mich.  459. 

3  McCullough  V.  Moss,  5  Denio  (N.  Y.),  .567;  New  York  Iron  Mine 
V.  First  N.  Bank,  39  Mich.  644;  Temple  v.  Pomroy,  4  Gray  (Mass.),  128; 
cf.  Edmunds  v.  Bushell,  L.  R.  1  Q.  B.  97. 

4  Hawtayne  v.  Bourne,  7  M.  &  W.  595;  Bickford  v.  Menier,  107 
N.  Y.  490;  Perkins  v.  Boothby,  71  Me.  91. 

5  Vescelius  v.  Martin,  11  Colo.  391;  Claflin  v.  Cont.  Jersey  Works, 
85  Ga.  27. 

6  Despatch  Line  v.  Mfg.  Co.,  12  N.  H.  205. 
1  Stewart  v.  Woodward,  50  Vt.  78. 

8  Millville,  &c.  Ins.  Co.  v.  Mechanics',  &c.  Ass'n,  43  N.  J.  L.  652; 
Mentz  V.  Lancaster  F.  Ins.  Co.,  79  Pa.  St.  475. 

9  Pitney  v.  Glen's  Falls  Ins.  Co.,  65  N.  Y.  6;  Continental  Ins.  Co.  v. 
Ruckman,  127  111.  364;  Miller  v.  Phoenix  Ins.  Co.,  27  Iowa,  203;  South 
Bend,  &c.  Co  v.  Dakota,  &c.  Ins.  Co.,  2  S.  Dak.  17;  Phoenix  Ins.  Co.  v. 
Munger,  49  Kans.  178. 

1°  Ruggles  V.  American  Central  Ins.  Co.,  114  N.  Y.  415;  Forward  t). 
Cont.  Ins.  Co.,  142  N".  Y.  382;  Machine  Co.  v.  Insurance  Co.,  50  Oh.  St. 
549  ;  Viele  v.  Germania  Ins.  Co.,  26  Iowa,  9. 


144  PRINCIPAL   AND   THIRD   PARTY. 

witli  an  insurance  agent  within  his  ostensible  authority  by 
secret  or  private  instructions  not  brought  to  their  atten- 
tion.i  ]jiit  if  the  third  party  knows  of  the  limitations  set 
by  the  princii)al  upon  the  agent's  authority,  a  contract  be- 
yond those  limits  would  not  be  binding  upon  the  principal.^ 
Wliethcr  restrictions  contained  in  a  policy  operate  as  notice 
to  the  insured  of  the  limitations  upon  the  agent's  authority, 
there  is  a  conflict  of  judicial  decisions.  As  to  acts  by  the 
agent  subsequent  to  the  issuing  of  the  policy,  the  restrictions 
in  the  policy  are  clearly  binding  and  effective  notice.^  But 
as  to  acts  prior  to  or  contemporaneous  with  the  issuing  of 
the  policy,  it  has  been  held  that  the  restrictions  in  the  policy 
are  not  binding  and  effective  unless  actually  known  to  the 
insured,  since  the  latter  cannot  be  held  to  anticipate  that 
such  restrictions  will  a])pcar  in  the  policy  when  delivered.* 
An  agent  to  receive  applications  and  premiums,  and  counter- 
sign and  deliver  policies,  has  no  implied  authority  to  receive 
notice  of  loss  or  to  adjust  losses.^  The  questions  connected 
with  insurance  are,  however,  so  numerous,  and  the  authori- 
ties so  conflicting,  that  the  student  must  be  referred  to 
special  works  upon  that  subject .^ 

(5)  Agent  authorized  to  colled.  An  agent  may  be  ex- 
pressly authorized  to  collect  money  for  his  principal,  and 
such  authority  may  be  implied  from  circumstances.  Such 
authority  is  not  necessarily  implied  from  the  mere  fact  that 

1  Union  :\Iut.  Ins.  Co.  v.  Wilkinson,  1;J  W:ill.  (U.  S  )  222;  Commer- 
cial,  &c.  Ins.  Co.  v.  State,  113  Ind.  331 ;  Ilaitford  ins.  Co.  v.  Farrish,  73 
111.  166. 

2  Baines  v.  Ewing,  L.  R.  1  Ex.  320;  4  II.  &  C.  511  ;  Armstrong  w. 
State  Ins.  Co.,  61  Iowa,  212;  Fleming  v.  Hartford  F.  Ins.  Co.,  42  Wis. 

616. 

8  Quinlan  v.  Providence,  &c.  Co.,  133  N.  Y.  356;  Ilankins  r.  Rockford 
Ins.  Co.,  70  Wis.  1 ;  Burlington  Ins.  Co.  v.  Gibbons,  43  Kans.  l-'). 

*  Continental  Ins.  Co.  v.  Ruckman,  127  111.  364;  Tubbs  v.  Dwelling 
House  Ins.  Co.,  84  INIich.  646 ;  Kausal  v.  ]\Iinnesota,  &c.  Ins.  Co  ,  31  Minn. 
17;  Mutual  B.  L.  Ins.  Co.  v.  Robison,  58  Fed.  Rep.  723.  See,  for  au- 
thorities pro  and  con,  Joyce  on  Ins.  §§  434-439. 

6  Ermentrout  v.  Girard,  &c.  Ins.  Co.,  63  Minn.  305.  But  see  Joyce 
on  Ins.  §  575  et  seq. 

«  May  on  Ins.  §§  118-155;  1  Joyce  on  Ins.  §§  386-603. 


CONTKACT   FOR   DISCLOSED    rUINCirAL.  145 

the  agent  is  authorized  to  present  the  bill  or  claim  to  the 
third  party/  but  it  may  be  implied  from  such  fact  and  its 
surroundiug  circumstances.''^  Nor  is  such  authority  to  be 
implied  from  the  mere  fact  that  the  agent  negotiated  the  con- 
tract out  of  which  the  claim  arose  ;'^  but  where  (he  agent 
sells  and  delivers  property  there  is  an  implied  authority  to 
collect  payment.*  Authority  to  collect  may  be  implied  from 
the  conduct  of  the  principal  in  holding  out  his  agent  as 
having  such  authority .°  Where  the  agent  is  entrusted  with 
securities  received  by  him  upon  the  negotiation  of  a  loan, 
it  is  imphed  that  he  is  authorized  to  receive  the  payments 
due  upon  such  securities.^  But  if  the  agent  has  not  pos- 
session of  the  securities,  no  authority  to  receive  payment 
upon  them  can  be  implied.''  Authority  to  receive  interest 
does  not  necessarily  carry  wdth  it  authority  to  receive  the 
principal  sum.^ 

An  agent  authorized  to  receive  payment  is  not  impliedly 
authorized  to  receive  anything  but  money. ^  He  cannot 
bind  his  principal  by  accepting  a  promissory  note,^*^  check,^^ 

1  Hirshfield  v.  Waldron,  54  Mich.  649. 

2  Luckie  v.  Johnston,  89  Ga.  321.  As  to  effect  of  a  notice  printed  on 
the  bill  that  it  is  "payable  at  the  office,"  or  "not  payable  to  agent,"  see 
Luckie  v.  Johnston,  supra ;  Law  v.  Stokes,  32  N.  J.  L.  249 ;  McKindly 
V.  Dunham,  55  Wis.  515;  Putnam  v.  French,  53  Yt.  402;  Trainer  v.  Mori- 
son,  78  Me.  160. 

»  Butler  V.  Dorman,  68  Mo.  298;  Higgins  v.  Moore,  34  N.  Y.  417; 
Crosby  v.  Hill,  39  Oh.  St.  100;  McKindly  v.  Dunham,  55  Wis.  515; 
Brown  v.  Lally,  79  Minn.  38. 

*  Butler  V.  Dorman,  supi-a;  Meyer  v.  Stone,  46  Ark.  210;  Cross  v. 
Haskins,  13  Vt.  536 ;  Barrett  v.  Deere,  M.  &  M.  200. 

5  Law  V.  Stokes,  32  N.  J.  L.  249 ;  Brooks  v,  Jameson,  55  Mo.  505 ; 
Home  Machine  Co.  v.  Ballweg,  89  111.  318;  Harris  v.  Simmerman,  81  111. 
413. 

6  Williams  i\  Walker,  2  Sandf.  Ch.  (N.  Y.)  225;  Haines  v.  Pohlmann, 
25  N.  J.  Eq.  179 ;  Crane  v.  Gruenewald,  120  N.  Y.  274. 

^  Crane  v.  Gruenewald,  supra  ;  U.  S.  Bank  v.  Burson,  90  Iowa,  191. 

8  Doubleday  v.  Kress,  50  N.  Y.  410. 

9  Ward  V.  Evans,  2  Salk.  442;  Thorold  r.  Smith,  11  Mod.  71,  87; 
Ward  V.  Smith,  7  Wall.  (U.  S.)  447. 

"  Jackson  v.  Mutual  Benefit  Life  Ins.  Co.,  79  Minn.  43. 
^^  Broughton  v.  Silloway,  114  Mass.  71. 

10 


146  PRINCIPAL    AND   THIRD    PARTY. 

druit,'  ur  luercluindise.-  lie  cannot  cunipromise  a  claim 
and  accept  less  than  the  I'tdl  umonnt  due,"  or  snbstitute 
himself  as  the  debtor.'*  Nor  can  he  extend  the  time  for 
jiavment.^     Nor  can  he  receive  payment  before  it  is  duc.*^ 

Th(-'  j)o\ver  to  collect  may  carry  with  it  the  power  to  cmjjloy 
the  means  necessary  to  that  end,  including  the  (■mitloyment 
of  counsel  and  tiie  bringing  of  actions  at  law." 

(tj)  A(jent  authorized  to  execute  or  indorse  bills,  notes,  and 
chc<'k.s.  The  j)ower  to  make  or  indorse  negotiable  instruments 
must  ordinarily  be  sought  in  an  express  authority  from  the 
principal.^  And  such  autliority  is  strictly  construed  and  must 
be  exercised  within  its  express  limitations.'-*  If  the  authority 
is  to  make  a  negotiable  instrument  for  a  siiecilied  amount,  an 
instrument  for  a  larger  amount  is  not  binding  upon  the 
princii)al.i'^  If  the  authority  is  to  make  a  negotiable  instru- 
ment for  a  specified  time,  an  instrument  for  a  different  time 
is  not  binding.^i  Authority  to  make  notes  for  commercial 
purposes  carries  with  it  no  authority  to  make  accommoda- 
tion notes.^2 

1  Drain  i;.  Doggelt,  41  Iowa,  082. 

2  Mudgett  V.  Day,  12  Cal.  13!);  Williams  v.  Jolinston,  92  N.  C. 
532. 

8  Mallory  v.  Mariner,  15  Wis.  172;  l\Ieh-in  v.  Lamar  Ins.  Co.,  80  111. 
44G;  Whipple  >:  Whitman,  13  11.  I.  512.  But  an  dgent  may  receive  and 
credit  a  part  payment.     Whelan  v.  lleilly,  (31  Mo.  565. 

*  Jackson  v.  Mut.  Ben.  L.  Ins.  Co.,  79  Minn.  43;  Aiiltman  r.  Lee,  43 
Iowa,  404. 

6  Ilutchings  V.  Manger,  41  N.  Y.  155;  Mallory  v.  Mariner,  supra. 

«  Smith  V.  Kidd,  68  N.  Y.  130. 

'  Ryan  v.  Tudor,  31  Kans.  306 ;  Merrick  v.  Wagner,  44  111.  206. 

8  Robertson  v.  Levy,  19  La.  An.  327;  Temple  v.  Pomroy,  4  Cray 
(Mass.),  128;  Jackson  v.  Bank,  02  Tenn.  154. 

9  Camden  Safe  Dep.  &  T.  Co.  v.  Abbott,  44  N.  J.  L.  2."i7 ;  Batty  r, 
Carswell,  2  Johns.  (N.  Y.)  48;  Nixon  v.  Palmer,  8  N.  Y.  398  ;  Farming- 
ton  Sav.  Bank  v.  Buzzell,  61  X.  H.  612. 

10  Blackwell  r.  Ketcham,  53  Ind.  1S4;  King  v.  Sparks,  77  Ga.  285. 

11  Batty  V.  Carswell,  2  Johns.  (N.  Y.)  48;  New  York  Iron  Mine  v. 
Citizens'  Bank,  44  Mich.  344;  King  v.  Sparks,  77  Ga.  285.  A  slight 
variation  may  not  be  fatal.     Adams  v.  Flanagan,  36  Vt.  400. 

1-  AVullace  v.  Bank,  1  Ala.  505;  .Etna  N.  B.  r.  Ins.  Co.,  50  Coim. 
167. 


CONTRACT   FOR   DISCLOSED    PRINCIPAL.  147 

The  power  to  make  or  indorse  negotiable  instruments  may 
be  implied  as  a  necessary  incident  of  powers  expressly  con- 
ferred.i  But  the  mere  fact  tliat  the  agent  is  authorized  to 
manage  a  business  docs  not  of  itself  show  a  power  to  make 
such  instruments.^ 

§  108.     Contracts  unauthorized. 

.  If  the  agent  has  neither  actual  nor  apparent  authority  for 
his  act,  the  principal  is  not  bound,  for  (1)  he  never  authorized 
the  contract,  and  (2)  he  never  led  a  reasonably  prudent  man 
to  believe  that  he  authorized  it.  The  third  party  must  there- 
fore look  to  the  agent  alone  for  redress.^  If  an  agent  be 
appointed  by  words  in  prwsenti,  but  it  is  agreed  that  the 
agency  shall  not  begin  until  the  happening  of  some  condition, 
the  principal  is  not  liable  for  contracts  entered  into  by  the 
agent  in  the  interim  unless  the  third  party  has  been  misled 
by  the  exhibition  by  the  agent  of  an  unconditional  power,  or 
by  other  conduct  equivalent  to  a  "holding  out"  on  the  part 
of  the  principal."*  A  third  person  has  no  riglit  to  rely  upon 
the  representations  of  the  agent  as  to  his  authority,^ 

To  this  rule  there  are  two  exceptions,  one  based  upon 
doctrines  peculiar  to  negotiable  instruments,  and  one  upon 
statutory  modifications.  If  the  principal  entrusts  to  the 
agent  negotiable  paper,  and  the  agent  sells  or  pledges  it  for 
a  valuable  consideration  to  a  purchaser  or  pledgee  without 
notice  of  its  diversion,  the  latter  gets  a  good  title  as  against 
the  principal,  as  fully  as  if  the  principal  had  authorized  the 
transfer.^     Under  the  Factors  Acts  a  principal  who  entrusts 

1  Edmunds  v.  Bushell,  L.  R.  1  Q.  B.  97;  Odiorne  v.  Maxcy,  13  Mass. 
178;  Yale  v.  Earaes,  1  Met.  (Mass.)  486. 

2  New  York  Iron  Mine  v.  Bank,  39  Mich.  644  ;  Temple  v.  Poraroy, 
4  Gray  (Mass.),  128;  Perkins  v.  Boothby,  71  Me.  91. 

8  Baines  v.  Ewing,  L.  R.  1  Ex.  320  ;  Re  Cunningham,  36  Ch.  Div. 
532;  Jackson  v.  Bank,  92  Tenn.  154;  Rice  v.  Peninsular  Club,  52 
Mich.  87. 

4  Rathbun  v.  Snow,  123  N.  Y.  343. 

8  Ibid. 

*  Goodwin  v.  Robarts,  1  App.  Cas.  476;  Simmons  v.  London  Joint 
Stock  Bank,  1892,  App.  Cas.  201 ;  Cheever  v.  Pittsburgh,  &c.  R.,  150 
N.  Y.  59. 


148  PRINCIPAL    AND    TIIIliD    I'AIiTY. 

liis  goods  to  a  factor  for  sale  is  bound  by  any  sale,  plcdu'c,  or 
other  disposition  of  the  goods,  to  a  purchaser  for  value  and 
without  notice  of  the  diversion,  as  fully  as  if  such  transfer 
had  been  authorized.^ 

J;  109.     Contracts  voidable. 

A  principal  is  not  bound  by  contracts  made  within  the 
scope  of  the  authority  where  they  are  brought  about  by  fiaud 
or  collusion  between  the  agent  and  the  third  i)arty.  Thus  if 
the  third  party  promise  the  agent  a  commission  or  reward 
for  bringing  about  a  contract  between  the  one  promising  and 
the  principal  of  the  agent,  the  contract  so  induced  will  be 
voidable  at  the  election  of  the  principal.  "'  Any  agreement  or 
understanding  between  one  principal  and  the  agent  of  another, 
by  which  such  agent  is  to  receive  a  commission  or  reward  if 
he  will  use  his  influence  with  his  principal  to  induce  a  con- 
tract, or  enter  into  a  contract  for  his  principal,  is  pernicious 
and  corrupt,  and  cannot  be  enforced  at  law.  .  .  .  Such  agree- 
ments are  a  fraud  upon  the  principal,  which  entitle  him  to 
avoid  a  contract  made  through  such  agency."  ^  But  tlie 
principal  may  elect  to  take  the  benefit  of  the  contract  not- 
withstanding the  fraud,  and  in  such  case  the  third  party  will 
be  bound.  And  this  is  so  even  if  the  princi})al  be  a  public 
corporation,  as  a  city,  since  the  contract  is  neither  malum 
in  se  nor  malum  prohibitum,  but  one  which  the  city  might 
have  made.^  And  after  such  election  it  may  sue  the  third 
party  for  fraud,  and  the  agent  for  money  had  and  received  to 
its  use.* 

2.     In  rarticular  Agencies. 
§  110.     Introductory. 

Little  lias  been  said  heretofore  as  to  the  scope  of  particular 
agencies  bearing  distinctive  names,  nor  will  the  purpose  of 
til  is   work  admit  of  any  extended  discussion  of  the  subject. 

1  Po^t,  §  171. 

2  City  of  Findlay  v.  Pertz,  66  Fed.  Rep.  427;  Smith  r.  Sorby,  3  Q.  B. 
D.  5.j2  n. 

'  City  of  Findlay  ?'.  Pertz.  supra. 

*  Ibid. ;  Mayor  i;.  Lever,  1891,  1  Q.  B.  168. 


CONTRACT   FOR   DISCLOSED   PRINCirAL.  149 

It  will  be  useful,  however,  to  call  attention  at  this  point  to 
the  fact  that  some  agents  have  by  custom  a  wider  apparent 
authority  than  others,  and  that  for  the  most  part  these  are 
agents  who  are  regularly  engaged  in  transacting  a  special 
kind  of  business  for  the  public  generally.  They  are  not,  like 
common  carriers  and  innkeepers,  obliged  to  serve  everybody 
who  applies,  and  yet  it  is  largely  the  custom  to  do  so  ;  and 
because  of  this,  and  the  settled  nature  of  their  business,  they 
are  governed  by  well  understood  mercantile  customs,  in  the 
light  of  which  the  principal  on  the  one  hand  and  the  third 
person  on  the  other  are  always  presumed  to  deal.  Another 
class  of  agents  are  those  who  serve  but  one  principal,  but 
from  the  nature  of  the  principal's  business  are  representing 
him  in  dealings  with  the  public  generally.  These  also,  not 
because  of  their  own  business,  as  in  the  first  class,  but 
because  of  their  principal's  business,  are  governed  by  well 
understood  mercantile  customs.  The  first  class  is  illus- 
trated by  the  agencies  of  factors,  brokers,  auctioneers,  and 
attorneys  at  law.  The  second  class  is  illustrated  by  the 
agencies  of  cashiers  of  banks,  insurance  agents,  and  ship- 
masters. 

§  111.     Factors. 

(1)  Definition.  A  factor  is  an  agent  whose  regular  busi- 
ness it  is  to  receive  consignments  of  goods  and  sell  them  for 
a  commission.  He  may  sell  for  the  ordinary  commission  for 
the  services  of  such  an  agent,  or  he  may  sell  for  an  increased 
commission  and  guarantee  his  principal  in  the  collection  of 
the  price.  In  the  first  case,  he  is  called  simply  a  factor  or 
commission  merchant ;  in  the  second,  he  is  called  a  del 
credere  factor  or  commission  merchant,  and  is  said  to  sell  on 
a  del  credere  commission. ^  If  he  accompanies  a  vessel  and 
represents  shippers  at  the  ports  where  the  vessel  may  touch, 
he  is  termed  a  supercargo. 

(2)  Scope  of  authority.  As  between  the  principal  and  the 
factor,  the  latter  is  bound  to  obey  the  instructions,  and  is 
liable  like  any  other  agent  for  any  damages  suffered  from 

1  Ante,  %  96. 


150  PRINCIPAL   AND   TIIIIID   PAKTY. 

his  failure  to  do  so.^  He  can  depart  from  sndi  instructions 
only  wlicn  justified  by  an  emergency  in  i\w  nature  of  reason- 
able necessity ,2  or  where  he  acts  to  protect  himself  from  loss 
on  his  own  advances  or  disbursements.^  But  as  between  the 
principal  and  third  persons,  the  former  is  bound  by  the 
contracts  made  by  the  factor  within  the  apparent  scope  of 
his  authoritv.  And  this  is  very  large.  Custom  has  annexed 
to  the  agency  powers  so  extended  that  buyers  of  the  goods 
are  o-enerally  protected  when  they  buy  in  the  usual  manner 
and  in. the  course  of  commercial  dealings,  and  these  customs 
have  been  supplemented  by  legislation  looking  to  the  same 
end.*  Accordingly  the  factor  has  power  to  sell  the  goods  in 
his  own  name,  and  at  such  time  and  for  such  prices  as  he 
deems  best  ;^  to  warrant  them  so  far  as  warranties  are  usual 
in  the  sale  of  similar  goods  '/'  to  receive  payment  in  a  sale 
for  cash,  or  negotiable  paper  in  a  sale  on  credit ; '  to  sell  on 
credit  so  far  as  it  is  usual  in  similar  cases  to  do  so  ;^  and  even 
to  pledge  the  goods  when  necessary  to  secure  the  payment  of 
charges  against  them  or  a  draft  drawn  against  the  prospective 
proceeds  by  the  principal.^  lie  has  no  authority  to  barter 
the  goods  in  exchange  for  others  ;  '^^  or  to  pledge  them  except 
to  secure  advances  ; "  or  to  receive  anything  for  them  except 
lawful  currency ;   or   to   compromise  or   arbitrate  or   subse- 

1  Talcott  V.  Chew,  27  Fed.  Rep.  273;  Phillips  v.  :\Ioir,  G9  111.  155. 

2  Greenleaf  v.  Moody,  13  Allen  (Mass.),  363. 

8  Davis  V.  Kobe,  36  Minn.  211 ;  Weed  v.  Adams,  37  Conn.  378;  Parker 
V.  Brancker,  22  Pick.  (Mass.)  40.     Cf.  Sims  v.  Miller,  37  S.  C.  402. 
*  Post,  §  171. 

6  Baring  v.  Corrie,  2  B.  &  A.  137;  Smart  r.  Sandars,  3  C.  B.  380. 

<-'  Dingle  v.   Hare,  7  C.  B.  n.  s.  145;   Randall  v.  Kehlor,  GO  Me.  37; 
Argersinger  v.  Macnaughton,  114  X.  Y.  535. 

7  Drinkwater  v.  Goodwin,  Cowp.  251  ;  Daylight  Burner  Co.  v.  Odlin, 
51  N.  II.  56. 

8  Houghton  V.  Matthews,  3  B.  &  P.  485;  Goodenow  v.  Tyler,  7  Mass. 
36;  Pinkham  v.  Crocker,  77  Me.  503. 

9  Boyce  v.  Bank,  22  Fed.  Rep.  53. 

10  Guen-eiro  v.  Peile,  3  B.  &  A.  616;  Wheeler,  &c.  Co.  v.  Givan,  65 
Mo.  89. 

11  Martini  I'.  Coles,  1  M.  &  S.  140;  Warner  r.  :\Iartin,  11  IIow.  (U.  S.) 

209. 


CONTRACT    FOR   DISCLOSED    PRINCIPAL.  151 

quently  extend  the  time  of  payment  of  the  amount  due  on 
the  sale.i  The  factor  may  sell  in  his  own  name,  and  it 
follows  that  the  customary  powers  partake  largely  of  the 
powers  of  an  owner.  The  limitation  is  that  the  agent  must 
sell,  not  pledge,  or  barter ;  but  even  this  limitation  has  been 
removed  by  statute  in  many  jurisdictions  for  the  protection  of 
innocent  parties.^ 

(3)  Rights  and  liaUlities  of  principal.  For  all  contracts 
made  by  the  factor  within  the  scope  of  the  authority,  as  above 
explained,  the  principal  is  liable,  and  under  the  Factors  Acts 
he  is  bound  even  where  the  factor  pledges  or  barters  the 
goods  for  his  own  benefit.^  And  this  is  true  whether  the 
principal  be  disclosed  or  not.  In  like  manner  the  principal 
may  avail  himself  of  the  benefits  of  the  contract,  whether 
disclosed  or  not.*  The  subject  of  foreign  principals  dealing 
through  domestic  factors  is  discussed  hereafter.^ 

§  112.     Brokers. 

(1)  Definition.  A  broker  is  an  agent  or  middleraaii  whose 
business  it  is  to  make  a  bargain  for  another,  or  bring  persons 
together  to  bargain,  and  receive  a  commission  on  the  trans- 
action as  compensation.^  He  differs  from  a  factor  in  that  he 
does  not  usually  have  possession  of  the  property  which  is  the 
subject  matter  of  the  transaction,  and  in  that  he  deals  in  the 
name  of  his  principal.  The  field  of  brokerage  is  much  larger 
than  that  of  factorage.  The  factor  buys  and  sells  goods. 
The  merchandise  broker  also  does  that ;  but  there  are  in 
addition  note  and  exchange  brokers  who  buy  and  sell  nego- 
tiable paper  and  foreign  exchange ;  stock  brokers  who  buy 
and  sell  stocks,  bonds,  and  other  securities  ;  real  estate  brokers 
who  buy  and  sell,  rent  and  mortgage  real  estate;  insurance 

1  Carnochan  v.  Gould,  1  Bailey  (S.  C),  179;  Howard  v.  Chapman, 
4  C.  &  P.  508. 

2  Post,  §  171.  '^  Ibid. 

"  Post,  §  129.  s  po^t,  §  187. 

«  Sibbald  v.  Bethlehem  Iron  Co.,  83  X.  Y.  378.  See  this  case  also  for 
discussion  of  the  question  when  a  broker  has  earned  his  commissions; 
and  also  Plant  v.  Thompson,  42  Kans.  6G4. 


152  ruiNoir.vL  and  ttiikd  i-autv. 

brokers  who  negotiate  insurance  usually  for  the  one  insured  ; 
and  other  classes  of  brokers  named  lor  tiie  ]»articular  character 
of  business  transacted. 

(2)  Scijpi'  of  autliority.  The  scope  of  a  broker's  authority 
is  much  narrower  than  that  of  a  factor.  He  must  obey  in- 
structions or  act  in  accordance  with  recognized  usages.^  A 
merchandise  broker  is  engaged,  for  instance,  in  selling  goods 
for  his  principal,  but  it  is  doubtful  whether  he  lias  any  author- 
ity to  wan-ant  them,^  although  of  course  a  warranty  in  the 
nature  of  a  condition  would,  if  false,  avoid  the  contract  \^  and 
a  "  commercial  traveller"  who  represents  but  one  principal  is 
to  be  distinguished  from  a  broker,*  He  is  authorized  to  make 
the  memorandum  required  to  satisfy  the  Statute  of  Frauds.^ 
He  may  give  credit,  but  only  if  usage  warrants.^  But  he  has 
no  authority  to  sell  in  his  ow^n  name,"  or  to  agree  to  barter 
or  pledge,  or  to  rescind  a  contract  once  made  by  him,^  nor 
has  he  any  authority  to  receive  payment  since  he  has  not 
possession  of  the  goods.^  As  to  other  brokers  than  those 
engaged  in  buying  and  selling  goods,  their  powers  are  fixed 
almost  wholly  by  custom,  and  the  principal  is  bound  by  all 
contracts  within  the  limits  of  the  custom.^*' 

(3)  Liahilltij  of  jrrmcipal.  A  principal  is  liable  for  the 
contract  of  his  broker  within  the  scope  of  the  authority, 
and  also  for  his  frauds/^  but  not  beyond  the  scope  of  the 
agency  ,^2 

^  AViltshiro  v.  Sims,  1  Camp.  258  ;  Clark  v.  Cumming,  77  Ga.  6-4. 

2  Dodd  V.  Farlow,  11  Allen  (Mass.),  42(5 ;  Smith  v.  Tracy,  3G  X.  Y.  79. 

8  Forcheimer  v.  Stewart,  65  Iowa,  593. 

*  As  in  Pickcrt  r.  Marston,  OS  Wis.  465. 

6  Parton  v.  Crofts,  16  C.  B.  n.  s.  11. 

6  Boorman  v.  Brown,  3  Q.  B.  511;  White  v.  Fuller,  67  Barb.  (X.  Y.) 
207. 

T  Baring  v.  Corrie,  2  B.  &  A.  137. 

8  Xenos  V.  Wickham,  L.  R.  2  II.  L.  296;  Saladin  v.  Mitchell,  45  111.  79. 

«  Higgins  r.  Moore,  34  X.  Y.  417;  Crosby  y.  Hill,  39  Oh.  St.  100. 
10  Skiff  y.  Stoddard,  63  Conn.  198;  Markham  v.  Jaudon,  41  X.  Y.  235, 
256. 
"  Samo  V.  Ins.  Co.,  20  U.  C.  C.  P.  405,  affirmed  2  Can.  Sup.  C.  411. 
^'^  Clark  V.  Cumming,  77  Ga.  64. 


CONTRACT   FOR    DISCLOSED    PRINCIPAL.  153 

§  113.     Auctioneers. 

(1)  Definition.  An  auctioneer  is  an  agent  whose  business 
it  is  to  sell  property  publicly  to  the  highest  bidder  and  receive 
a  commission  on  the  proceeds  of  the  sale.  He  may  receive 
compensation  otherwise,  or  may  work  gratuitously,  but  his 
habit  is,  and  therefore  an  element  of  his  business  is,  to  re- 
ceive commissions.  He  represents  the  seller  in  making  the 
terms  of  the  sale,  but  may  and  usually  does  represent  the 
buyer  also  in  reducing  the  terms  to  writing,  to  satisfy 
the  Statute  of  Frauds.^  Until  the  fall  of  the  hammer  he  is 
the  agent  of  the  seller  •  after  that  he  is  the  agent  of  both 
parties. 

(2)  Sco'pe  of  authority.  As  to  his  principal  an  auctioneer 
must  obey  instructions  like  any  other  agent.^  As  to  third 
persons  authority  is  to  be  gathered  from  the  customs  usually 
followed  in  auction  sales.  These  are  :  to  sell  for  cash,  and 
not  on  credit  or  for  other  goods  or  for  negotiable  paper ;  ^  to 
receive  the  price  in  cash  at  the  time  of  the  sale,  or  such  a 
deposit  of  cash  as  is  prescribed  by  the  terms  of  the  sale ;  and, 
if  it  be  not  paid,  to  bring  an  action  in  his  own  name  for  its 
recovery;*  to  follow  the  terms  of  the  sale,  when  these  are 
known,  and  no  others,  so  that  if  the  terms  prescribe  for  an 
interest-bearing  note,  with  surety,  cash  cannot  be  received 
instead.^  Ordinarily  he  has  no  implied  authority  to  warrant 
the  quality  of  the  goods  sold  ;  ^  or  to  rescind  a  sale  once  made ;  '^ 
or  to  sell  at  private  sale.^  If  he  exceeds  the  authority  actually 
conferred,  and  that  implied  from  the  nature  of  the  agency, 
the   principal   is   not   bound.^     But  if   he   keeps  within  the 

1  White  V.  Proctor,  4  Taunt.  209 ;  Walker  r.  Herring,  21  Gratt.  (Ya.) 
678;  Johnson  r.  Buck,  35  X.  J.  L.  338. 

2  Farr  v.  John,  23  Iowa,  286. 

8  Williams  v.  Evans,  L.  R.  1  Q.  B.  352;  Broughton  v.  Silloway,  114 
Mass.  71. 

*  Thompson  r.  Kelly,  101  Mass.  291 ;  Johnson  v.  Buck,  su-pra. 

*  Morgan  v.  P>ast,  120  Ind.  42. 

*>  Blood  V.  French,  9  Gray  (Mass.),  197;  Payne  v.  Leconfield,  51  L.  J. 
Q.  B.  642. 

7  Nelson  v.  Aldridge,  2  Stark.  435. 

8  Marsh  v.  Jelf,  3  F.  &  F.  234.  9  Bush  v.  Cole,  28  N.  Y.  261. 


154  PRINCIPAL    AND    THIRD    PARTY. 

autliority,  the  principal  is  liable  for  refusing  to  complete  the 
contract.^ 

§  114.     Attorneys  at  law. 

(^1)  Ihti/iition.  An  attorney  at  law  is  nn  agent  whose 
business  it  is,  as  a  duly  (lualified  oflicer  of  a  court,  to  repre- 
sent his  principal  in  the  conduct  of  litigation  or  other  legal 
proceedings.  A  distinction  exists  in  England  between  bar-, 
risters,  who  represent  the  client  at  the  bar,  that  is,  when 
actually  before  the  court,  and  S(jlicitors,  who  represent  the 
client  generally  throughout  a  legal  proceeding.^  In  the 
United  States,  however,  the  distinctions  between  barristers, 
or  advocates,  or  counsel,  and  solicitors,  or  attorneys,  or  proc- 
tors, has  practically  disai)peared.  The  term  attorney  at  law 
now  includes  the  notion  formerly  conveyed  by  these  separate 
terms.  The  courts  generally  have  the  power  to  prescribe  the 
qualifications  of  those  who  appear  before  them  to  represent 
litigants,  and  it  has  even  been  doubted  whether  the  legisla- 
ture could,  without  constitutional  sanction,  de[»rive  the  courts 
of  this  power.^ 

(2)  Scope  of  authority.  The  attorney  is  appointed  to  con- 
duct the  affairs  of  his  client  in  court,  and  has  therefore  a 
very  wide  discretion  in  their  management.  All  the  usual  and 
customary  steps  in  a  j^roceeding  may  be  taken  under  this 
implied  or  customary  authority  and  will  bind  the  client. 
"An  attorney  at  law  has  authority,  by  virtue  of  his  employ- 
ment as  such,  to  do  in  behalf  of  his  client  all  acts,  in  or  out 
of  court,  necessary  or  incidental  to  the  })rosccution  and  man- 
agement of  the  suit,  and  which  affect  the  remedy  only,  and 
not  the  cause  of  action."  ^  It  has  been  generally  held  in  the 
United  States  that  this  limitation  of  the  authority  to  the  con- 
trol over  remedies  precludes  the  power  to  compromise  the 

1  Cockcroft  V.  Muller,  71  N.  Y.  367. 

"•  See  Sweet's  Law  Dictionary;  19  Am.  Law  Rev.  077.  For  the  his- 
tory of  the  rise  of  attorneys  at  law  as  a  special  class,  see  1  Pollock  and 
Maitlanrl's  Mist,  of  Eiig.  Law.  190-196. 

8  Matter  of  GoodelC  39  Wis.  232;  In  re  Day,  181  111.  73. 

*  Moulton  V.  Bowker,  115  Mass.  36;  Clark  i'.  Randall,  9  Wis.  135. 


CONTRACT   FOR   DISCLOSED   TRINCIPAL.  155 

claim,  cither  before  or  after  judgment.^  In  England  the  hold- 
ing is  otherwise,  and  in  some  of  the  United  States.^  But  it 
is  held  tliat  he  may  submit  the  claim  to  arbitration. ^  He  may 
agree  that  property  shall  be  sold  pending  an  appeal  as  to  the 
validity  of  a  lien,  for  which  a  decree  of  sale  has  already  been 
entered,  and  the  money  paid  into  court  to  abide  the  decision 
on  the  appeal."^  He  may  direct  a  levy  as  a  proper  remedy  for 
the  collection  of  a  claim,  and  if  the  levy  be  wrongful  the  prin- 
cipal is  liable.^  In  general  he  may  control  tlie  management 
of  the  proceeding,  but  he  "  may  not  compromise  tlie  rights  of 
his  client  outside  of  his  conduct  of  the  action,  or  accept  less 
than  the  full  satisfaction  sought,  or  release  his  client's  right, 
or  subject  him  to  a  new  cause  of  action."  "^ 

§  115.     Bank  cashiers. 

(1)  Definition.  "  The  cashier  is  tlie  executive  officer, 
through  whom  the  whole  financial  operations  of  the  bank 
are  conducted.  He  receives  and  pays  out  its  moneys,  collects 
and  pays  its  debts,  and  receives  and  transfers  its  commercial 
securities.  Tellers  and  other  subordinate  officers  may  be 
appointed,  but  they  are  under  his  direction,  and  are,  as  it 
were,  the  arms  by  w^hich  designated  portions  of  his  various 
functions  are  discharged." ''  A  bank  cashier  is  the  chief 
executive  agent  of  the  bank;  the  directors  are  the  delibera- 
tive managing  agents.  "  It  is  not  wholly  unapt  to  liken  the 
board  of  directors  to  a  bench  of  judges,  and  the  cashier  to 
the  clerk  of  the  court."  ^ 

1  Whipple  V.  ^W\\tm&\^,  13  R.  I.  512;  Maddux  v.  Bevan,  39  Md.  485; 
Watt  V.  Brookover,  35  W.  Va.  323;  Preston  v.  Hill,  50  Cal.  43. 

2  Prestwich  v.  Poley,  18  C.  B.  n.  8.  806;  Bonney  v.  Morrill,  57  Me.  368. 

3  Faviell  v.  Eastern  Counties  R.,  2  Ex.  344 ;  Brooks  v.  New  Durham, 
55  N.  H.  559;  Sargeant  v.  Clark,  108  Pa.  St.  588.  Cf.  McPherson  v. 
Cox,  86  N.  Y.  472. 

4  HaUiday  v.  Stuart,  151  U.  S.  229. 

5  Morris  v.  Salberg,  22  Q.  B.  D.  614;  Caswell  i'.  Cross,  120  Mass. 
545 ;  Howell  v.  Caryl,  50  Mo.  App.  440. 

«  Lewis  V.  Duane,  141  N.  Y.  302,  314;  Kirk's  Appeal,  87  Pa.  St.  243; 
James  v.  Ricknell,  20  Q.  B.  D.  164. 

7  Merchants'  Bank  v.  State  Bank,  10  Wall.  (U.  S.)  604,  650, 

8  1  Morse  on  Banking,  §  152. 


156  PmNCIPAL    AND    THIRD    PARTY. 

(2)  Scope  of  authority.  Custom  lias  fixed  with  considera- 
ble precision  the  authority  of  a  bank  cashier,  and  tiiis  authority 
ho  may  be  presumed  to  possess  without  special  dcle<,^ation 
from  the  directors,  and  even  as  against  a  sjiceial  restriction 
nnknown  to  a  third  person  dealing  with  the  hank.  The  ques- 
tion whether  he  does  or  does  not  possess  authority  to  du  any 
particular  act  is  ordinarily  one  for  the  coui't  and  not  for  the 
jury.i  By  the  powers  inherent  in  his  oftice  a  cashier  has 
anthority  to  draw  checks  or  drafts  upon  the  funds  of  the 
bank  deposited  with  other  banking  or  trust  comi)anies ;  ^  to 
indorse  and  transfer  for  collection,  discount,  or  sale  the  nego- 
tiable paper  or  securities  owned  by  the  bank  ;  ^  to  buy  and 
sell  bills  of  exchange;^  to  borrow  money  ;^  to  collect  the 
moneys  due  the  bank  ;6  and  to  certify  checks  drawn  by  de- 
positors against  funds  in  the  bank."  He  has  no  power  to 
bind  the  bank  to  accept  a  draft  to  be  drawn  in  the  future,^ 
or  to  bind  the  bank  on  a  certification  of  his  own  check, »  or 
as  accommodation  indorser  of  his  own  note  or  bill.^*^ 

§  116.     Shipmasters. 

(1)  Definition.  A  shipmaster  is  an  agent  who  has  entrusted 
to  him  the  management  and  government  of  the  ship  upon  a 
voyage.  He  is  the  first  or  head  officer  upon  a  merchantman, 
and  as  such  is  responsible  for  the  safety  of  the  ship  and  cargo, 
and  is  vested  in  consequence  with  very  extensive  powers.^^ 

1  Merchants'  Bank  v.  State  Bank,  supra. 

2  :\[echanics'  Bank  r.  Bank  of  Columbia,  5  "Wlieat.  (U.  S.)  326. 
8  Wild  r.  Bank,  3  Mason  (U.  S.  C.  C),  505. 

"  Unci. 

6  Barnes  v.  Ontario  Bank,  19  N.  Y.  152;  Grain  i'.  Bank,  11-1  Til.  516. 

6  Concord  v.  Bank,  16  N.  H.  26. 

'  Merchants'  Bank  v.  State  Bank,  supra  :  Cooke  r.  State  Bank,  52 
N.  Y.  96.  A  verbal  certification  was  held  good  in  Espy  r.  Bank,  18  Wall. 
(U.  S.)  604.  Denying  a  cashier's  inherent  power  to  certify  checks,  see 
Mussey  v.  Eagle  Bank,  9  Met.  (Mass.)  306. 

8  Flannagan  v.  California  N.  Bank,  56  Fed.  Rep.  959. 

5  Claflin  V.  Farmers',  &c.  Bk.,  25  N.  Y.  293. 

1'^  West  St.  Louis  Sav.  Bk.  v.  Shawnee  County  Bk.,  95  U.  S.  557. 

Ji  Hubbell  V.  Denison,  20  AVend.  (N.  Y.)  181;  Martin  v.  Farnsworth, 
1  Jones  &  Spencer  (N.  Y.  City  Sui^erior  Court),  246. 


CONTRACT   FOR    DISCLOSED    PKINCIPAL.  157 

(2)  Scope  of  authority.  As  regards  the  navigation  of  the 
vessel  the  master  has  ahsolute  control  and  authority.  As 
regards  discipline  his  authority  is  extensive,  but  its  wilful 
abuse  will  not  render  the  owner  liable  to  a  seaman,  though  it 
might  to  a  passenger.^  And  such  discipline  is  justified  at  all 
only  on  the  high  seas  and  not  in  port.^  As  regards  authority 
to  make  contracts,  the  nature  and  extent  of  such  authority  is 
determined  by  the  customs  of  the  seas  and  the  necessities  of 
the  situation,  and  is  to  be  determined  by  the  law  of  the 
country  to  which  the  ship  belongs.^  He  has  authority  to 
make  "  contracts  relative  to  the  usual  employment  of  the 
ship  ;  to  give  a  warranty  in  such  contracts ;  to  enter  into 
contracts  for  repairs  and  necessaries  to  the  ship;"  to  sell  a 
perishable  cargo  to  preserve  it  from  destruction,  or  a  wrecked 
ship  and  cargo  where  it  is  impossible  or  highly  imprudent  to 
attempt  to  carry  them  to  their  destination  ;  to  hypothecate 
the  ship,  freight,  and  cargo  in  case  of  extreme  necessity ; 
to  borrow  money  in  case  of  extreme  necessity,^  The  further 
discussion  of  a  shipmaster's  powers  belongs  to  a  treatise  on 
shipping  and  admiralty  law. 

1  Gabrielson  v.  Waydell,  135  N.  Y.  1. 

2  Padmore  v.  Piltz,  44  Fed.  Rep.  104. 

8  The  Karnak,  L.  R.  2  P.  C.  505;  The  Gaetano  and  Maria,  L.  R. 
7  P.  D.  137;  The  August,  1891,  Pro.  328. 

4  Evans  on  Agency  (2d  ed.),  pp.  146-152 ;  Swell's  ed.  pp.  176-182 ; 
Story  on  Agency,  §§  116-123;  McCready  v.  Thorn,  51  N.  Y.  454;  Gunn 
V.  Roberts,  L.  R.  9  C.  P.  331;  Arthur  v.  Barton,  6  M.  &  W.  138. 


158  PRINCIPAL  AND   THIRD   PARTY. 


K\ 


CHAPTER   X. 

Y  '  CONTRACT  OF  AGENT  IN   BEHALF  OF  AN  UNDISCLOSED  PRINCIPAL. 


§  117.     Introductory. 

It  sometimes  haj)pens  tliat  an  agent  makes  a  contract  in  his 
own  name  and  ostensibly  for  his  own  benefit,  but  in  reality 
for  the  benefit  of  an  undisclosed  principal.  In  such  a  case 
there  are  two  relations  established,  —  first,  the  relation  of  the 
agent  to  the  third  person  under  the  contract  made  in  the 
agent's  name,  and  second,  the  relation  of  the  principal  to 
the  third  person  under  the  contract  made  for  the  principal's 
benefit.  The  first  relation  will  be  discussed  in  a  subsequent 
chapter.^  We  are  now  concerned  with  the  liabilities  and 
rights  of  the  undisclosed  principal. 

In  order  to  make  clear  the  outlines  of  a  difficult  branch  of 
the  law  we  will  discuss:  (1)  the  doctrine  of  the  privity  of 
contract  in  the  English  law  and  its  general  application  to  the 
subject  of  the  undisclosed  principal ;  (2)  the  rules  applicable 
to  the  liability  of  an  undisclosed  principal ;  (3)  the  rules  ap- 
plicable to  the  rights  of  an  undisclosed  principal. 

1.   The  Doctrine  of  Privity  of  Contract. 

§  118.     General  statement  of  the  doctrine. 

A  fundamental  notion  of  the  common  law  is  that  a  contract 
creates  strictly  personal  obligations  between  the  contracting 
parties.  "  A  person  has  a  right  to  select  and  determine  with 
whom  he  will  contract,  and  cannot  have  another  person  thrust 
upon  him  without  his  consent."  ^  It  was  this  notion  that  lay 
at  the  basis  of  the  common  law  rules  as  to  the  non-assignability 

1  Post,  §  196  e<  seq. 

2  Boston  Ice  Co.  i'.  Potter,  123  Mass.  28 ;  Boultou  v.  Jones,  2  II.  &  N. 
564. 


CONTRACT   FOR   UNDISCLOSED   PRINCIPAL.  159 

of  contracts ;  ^  it  has  even  yet  yielded  only  to  the  extent  of 
allowing  an  assignee  to  enforce  rights  owing  to  his  assignor 
where  the  assignor  has  fully  performed  his  obligations  and  it 
can  make  no  difference  to  the  defendant  to  whom  he  pays 
money  or  delivers  goods,  or  where  the  assignee  can  fairly  be 
deputized  to  discharge  the  assignor's  duties,  the  latter  remain- 
ing liable  for  any  breach.^  It  is  still  a  question  of  much  diffi- 
culty as  to  how  far  executors  or  administrators  succeed  to  the 
rights  and  obligations  of  their  decedents  under  operation  of 
law.3  The  doctrine  is  very  comjirehensive  that  "you  have  a 
right  to  the  benefit  you  contemplate  from  the  character, 
credit,  and  substance  of  the  party  with  whom  you  contract."* 
Even  if  B  makes  a  promise  to  C,  upon  a  consideration 
moving  from  the  latter,  expressly  for  the  benefit  of  D,  D  can- 
not in  England  maintain  an  action  upon  the  promise.^  In  the 
United  States,  however,  such  actions  are  generally  allowed,  at 
least  where  at  the  time  of  the  promise  there  is  a  duty  or  ob- 
ligation owing  from  C  to  D  which  C  seeks  to  dischai-ge  or 
provide  for  by  giving  to  D  the  benefit  of  the  contract  with  B. 
This  has  been  put  upon  the  doctrine  of  agency  and  subsequent 
ratification;^  upon  the  doctrine  of  a  kind  of  common  law 
"  trust "  enforceable  as  for  money  or  other  thing  had  and  re- 
ceived to  the  benefit  of  C  ; '  upon  the  doctrine  "  that  the  law, 

1  Pollock  on  Cent.  (6th  ed.)  204,  701;  Ames,  3  Harv.  Law  Rev.  338- 
339. 

2  Arkansas,  &c.  Co.  v.  Belden  Co.,  127  U.  S.  379  ;  Rochester  Lantern 
Co.  V.  Stiles,  &c.  Co.,  135  K  Y.  209;  La  Rue  v.  Groezinger,  84  Cal.  281; 
Robson  V.  Drummond,  2  B.  &  Ad.  303;  British  Waggon  Co.  v.  Lea,  L.  R. 
5  Q  B.  D.  149. 

3  Dickinson  v.  Calahan's  Adni'rs,  19  Pa.  St.  227;  Lacy  y.  Getnian,  119 
N.  Y.  109;  Drummond  u.  Crane,  159  Mass.  577. 

*  Humble  v.  Hunter,  12  Q.  B.  310,  317;  Boston  Ice  Co.  v.  Potter, 
supra ;  Arkansas,  &c.  Co.  v    Belden  Co.,  svpra. 

6  Tweddle  v.  Atkinson,  1  B.  &  S.  393.  Accord  Exchange  Bank  v. 
Rice,  107  Mass.  37;  Borden  v.  Boardman,  157  Mass.  410;  Linneman  v. 
Moross,  98  Mich.  178. 

^  See  opinion  of  Johnson,  C.  J.,  and  Denio,  J.,  in  Lawrence  v.  Fox, 
20N.  Y.  268. 

'  See  Vrooman  i;.  Turner,  69  N.  Y.  280;  Jefferson  v.  Asch,  53  Minn. 
446. 


160  ITJ-NCIPAL    AND    TllIKD    TARTY. 

o{)eratin<r  upon  tlie  act  of  the  jturties,  creates  tlic  duty,  cstal*- 
lislies  the  privity,  and  implies  the  promise  and  oblig"ation  on 
which  the  action  is  founded;"^  and  upon  a  doctrine  of  con- 
venience, namely,  that  "  it  accords  the  remedy  to  the  party 
Mho  in  most  instances  is  chielly  interested  to  enforce  the 
promise,  and  avoids  multijdicity  of  actions."''^  The  doctrine 
as  applied  in  the  United  States  is  confessedly  an  anomaly, 
but  serves  to  illustrate  the  fact  that  anomalous  doctrines  arc 
sometimes  admitted  into  the  law  where  they  aid  to  work  out 
su])stantial  justice,  and  that  the  strict  common  law  rule  as  to 
j)rivity  of  contract  has  important  exceptions.^ 

§  119.     Application  to  agency  generally. 

The  licneral  doctrines  of  agency  do  not  run  counter  to  the 
fundamental  dogma  as  to  privity  of  contract.  Where  the 
])riucipal  is  disclosed  the  third  party  deals  with  him,  and  not 
with  the  agent,  and  relies  upon  his  character,  credit,  and  sub- 
stance, and  not  upon  that  of  the  agent.  The  agency  is  merely 
a  means  through  which  the  minds  of  the  principal  and  the 
third  party  meet  in  mutual  agreement.  When  once  the  con- 
tract is  formed  the  agent  drops  out.  The  dii'liculties  arising 
from  unauthorized  contracts  subsequently  ratified  have  already 
been  discussed.'*  The  difficulties  arising  in  the  enforcement 
of  rights  against  the  agent  upon  an  unauthorized  contract  not 
subsequently  ratified  will  be  discussed  hereafter.^  We  have 
now  to  consider  tlie  difTiculties  attending  the  enforcement  of 
rights  against  an  undisclosed  ])rincipal,  and  the  greater  diffi- 
culties attending  the  enforcement  of  rights  by  an  undisclosed 
principal. 
§  120.     Application  to  contracts  for  undisclosed   principal. 

A  more   scri(jus   difiiculty  presents   itself   in   the   doctrines 
peculiar  to  undisclosed  princii)als.     In  the  case  of  a  conti-act 

1  McDowell  V.  I.aev,  35  Wis.  171. 

2  Lehow  V.  Simonton,  3  Colo.  3i0 ;  Wood  i-.  Moriarty,  15  R.  I.  518. 

8  See  Huffcut's  Ausou  on   Coiit.   pp.  279-282;    Ilaniman  on   Cont. 
pp.  216-228. 

*  Ante,  §  38.   An  unauthorized  contract  made  for  an  undisclosed  princi- 
pal cannot  be  ratified.  Kcighley  v.  Durant,  1901,  App.  Cas.  210;  ante,  §  32. 

*  Post,  §  183. 


CONTRACT    FOR    UNDISCLOSED    miNCIPAL.  161 

made  by  an  agent  in  his  own  name,  as  princij)al,  tlie  third 
party  obviously  relies  upon  the  character,  credit,  and  sul)- 
stance  of  the  agent  alone,  and  intends  to  acquire  rights 
against  the  agent  and  against  no  one  else,  and  to  incur  obli- 
gations to  the  agent  and  to  no  one  else.  So  far  at  least  as  the 
third  party  is  concerned  it  is  a  contract  between  him  and  the 
agent,  and  the  principal  is  never  for  a  moment  in  his  contem- 
plation. The  strict  application  of  the  common  law  rule  would 
lead  to  the  conclusion,  therefore,  that  the  principal  could 
neither  sue  nor  be  sued  upon  the  contract. 

Yet  just  the  opposite  conclusion  prevails.  The  case  escapes 
the  common  law  doctrine  and  establishes  the  sweeping  rule 
that  an  undisclosed  principal  may  both  sue  and  be  sued  upon 
a  contract  made  in  his  behalf  or  to  his  secret  use  by  his 
agent.  "  If  an  agent  makes  a  contract  in  his  own  name,  the 
principal  may  sue  and  be  sued  upon  it ;  for  it  is  a  general 
rule,  that  whenever  an  express  contract  is  made,  an  action  is 
maintainable  upon  it,  either  in  the  name  of  the  person  with 
whom  it  was  actually  made,  or  in  the  name  of  the  person  with 
whom,  in  point  of  law,  it  was  made."  ^  The  rule  is  probably 
the  outcome  of  a  kind  of  common  law  equity,  powerfully  aided 
and  extended  by  the  fiction  of  the  identity  of  principal  and 
agent  and  the  doctrine  of  reciprocity  or  mutuality  of  con- 
tractual obligations.  The  rule  has  two  distinct  parts :  (1)  that 
the  undisclosed  principal  may  be  sued ;  (2)  that  the  undis- 
closed principal  may  sue.  The  first  is  probably  based  upon 
the  notion  that  it  is  inequitable  to  allow  the  principal  to  take 
the  benefits  of  a  contract  made  by  his  agent  and  compel  the 
third  person  to  look  only  to  the  agent  for  compensation.  The 
second  is  based  upon  the  notion  that  contract  obligations  re- 
quire mutuality,  and  that,  since  the  principal  may  be  sued 
he  must  also  be  permitted  to  sue.  The  fiction  of  identity  is 
employed  to  establish  a  real  or  true  assent  on  the  part  of  the 
principal  in  place  of  an  assent  or  promise  constructed  by 
the  law,  such  as  is  created  in  all  that  class  of  obligations 
known  as  quasi-contracts.  Whatever  the  true  grounds  of  this 
doctrine,  it  is  at  all  events  conceded  that  the  one  case  in  which 

1  Cothay  v.  Feunell,  10  B.  &  C.  671. 
U 


1G2  PRINCirAL    AND    TIIIKD    PARTY. 

a  person  not  a  party  to  a  contract  may  nnqnostionably  sue 
and  also  1)C  sued  is  the  case  of  tlie  undisclosed  principal. 

§  121,     Suits  against  undisclosed  principal. 

The  action  against  an  undisclosed  i)i-incipal  rests  logically 
upon  the  ground  that  the  principal's  estate  has  had  the 
benefit  of  the  contract  and  ought  to  bear  the  burden.  This 
doctrine  is  as  old  as  the  Year  Books  in  which  wc  read  that  an 
action  of  debt  was  maintained  against  an  abbot  on  the  count 
that  the  plaintiff  had  lent  money  and  sold  a  horse  to  a  monk, 
"  which  money  and  horse  came  to  the  profit  of  the  house, 
etc."  ^  It  is  illustrated  in  many  modern  cases,  where,  clearly, 
the  decision  need  not  go  further  than  the  doctrine  that  where 
the  principal's  estate  is  unjustly  enriched  at  the  expense  of  the 
third  party's,  the  latter  may  maintain  assumpsit  for  the  value 
of  the  benefit  conferred.^  Such  an  action  does  not  logi- 
cally rest  upon  a  true  contractual  obligation  arising  from  the 
assent  of  the  parties,  but  upon  a  quasi-contractual  obligation 
created  by  the  law  on  grounds  of  justice  and  fair  dealing. 
But  for  the  aid  of  the  fiction  of  identity  of  principal  and 
agent  the  courts  might  have  been  driven  into  so  treating  it. 
and  limiting  the  recovery  to  the  measure  of  benefits  conferred. 
In  that  case  the  doctrine  would  never  have  been  extended  to 
include  the  second  half  of  the  rule  which  gives  the  undisclosed 
jirincipal  an  action  against  the  third  party,  except  in  the  case 
where  the  third  person's  estate  had  Ijcen  unjustly  enriched  at 
the  expense  of  the  principal's. 

This  is  illustrated  in  the  case  of  Kayton  v.  Barnctt.^  X 
having  declined  to  sell  to  P,  the  latter  procured  A  to  purchase. 
X  expressly  stated  that  he  would  not  sell  to  P,  and  A  there- 
upon assured  X  that  he  was  not  buying  for  P  but  for  himself. 

1  Y.  B.  34  &  :55  Edw.  I.  pp.  560-560  (1307).  See  also  Doctor  and  Stu- 
dent (1518),  where  we  read  (l)ia.  ii.  cli.  42):  ''If  the  .servant  lu  that 
case  buy  them  in  his  own  name,  not  speaking  of  his  master,  the  master 
shall  not  be  charged,  unless  the  things  bought  come  to  his  use."  xiud 
see  Gurratt  v.  Culluin,  stated  in  Scott  v.  Surman,  Willes,  400,  405. 

2  Nelson  v.  Powell,  3  Doug.  410;  Wilson  v.  Hart,  7  Taunt.  205;  Kay- 
ton V.  Barnett,  116  N.  Y.  625;  Plenderson  v.  Mayhew,  2  Gill  (INId.),  393. 

«  116  X.  Y.  625. 


CONTEACT    FOR   UNDISCLOSED    PRINCIPAL.  163 

X  was  nevertheless  allowed  to  maintain  an  action  against  P 
for  the  price.  The  court  through  FoUett,  Ch.  J.,  said  :  "  Not- 
withstanding the  assertion  of  the  plaintiffs  that  they  would 
not  sell  to  the  defendants,  they,  through  the  circumvention  of 
Bishop  and  the  defendants,  did  sell  the  property  to  the  de- 
fendants, who  have  had  the  benefit  of  it,  and  have  never  paid 
the  remainder  of  the  purchase-price  pursuant  to  their  agree- 
ment. Bishop  was  the  defendants'  agent.  Bishop's  mind 
was,  in  this  transaction,  the  defendants'  mind,  and  so  the 
minds  of  the  parties  met,  and  the  defendants  having,  through 
their  own  and  their  agent's  deception,  acquired  the  plaintiffs' 
property  by  purchase,  cannot  successfully  assert  that  they  are 
not  liable  for  the  remainder  of  the  purchase-price  because 
they,  through  their  agent,  succeeded  in  inducing  the  de- 
fendants to  do  that  which  they  did  not  intend  to  do,  and, 
perhaps,  would  not  have  done  had  the  defendants  not  dealt 
disingenuously." 

Here  is  a  curious  mixture  of  the  equitable  notion  that  the 
defendant  ought  to  reimburse  the  plaintiff  for  the  benefits 
received,  and  the  notion  that  the  defendant  had  in  verity 
promised  to  do  so  because  his  agent  had  promised,  and  the 
agent's  mind  is  the  principal's  mind  and  so  the  minds  of  the 
parties  have  met. 

But  the  doctrine  once  established  that  the  contract  obliga- 
tion rests  upon  assent,  and  it  will  speedily  be  extended  beyond 
the  cases  where  benefits  have  been  conferred,  and  the  third 
party  will  be  given  an  action  upon  a  bilateral  executory  con- 
tract.i  And  actions  will  be  given  in  cases  where  the  principal 
is  guilty  of  no  inequitable  conduct,  as  where,  for  instance,  he 
has  given  his  agent  funds  with  wliich  to  purchase,  and  the 
agent  has  purchased  in  his  own  name  on  credit,  under  circum- 
stances where,  had  the  agency  been  known,  it  would  be  reason- 
able to  infer  that  he  had  authority  to  purchase  on  credit.^ 


1  Episcopal  Church  v.  Wiley,  2  Hill  Ch.  (S.  C.)  584;  s.  c.  1  Riley, 
Ch.  (S.  C.)  156;  Schmaltz  r.  Avery,  10  Q.  B.  655. 

2  See  remarks  of  Wallace,  J.,  in  Fradley  v.  Ilyland,  37  Fed.  Rep.  49, 
52-53,  and  the  conclusion,  "  But  it  is  probably  too  late  to  consider  the 


1G4  nuNcirAL  and  tiiikd  party. 

§  122.     Suits  by  undisclosed  principal. 

Having  reached  the  conclusion,  by  aid  of  the  fiction  of 
identity,  that  the  minds  of  the  parties  have  met,  it  is  easy 
to  invoke  the  doctrine  of  recijirocity  or  mutuality  of  con- 
tract and  hold  that  the  undisclosed  principal  may  also  sue 
the  thiid  party,  although,  in  fact,  the  third  party  never 
undertook  and  never  intended  to  undertake  an  obligation 
in  favor  of  the  principal,^  "  The  contract  of  the  agent  is 
the  contract  of  the  principal,  and  he  may  sue  or  be  sued 
thereon,  though  not  named  therein ;  and  notwithstanding 
tlie  rule  of  law  that  an  agreement  reduced  to  writing  may 
not  be  contradicted  or  varied  by  parol,  it  is  well  settled  that 
the  ])rincipal  may  show  that  the  agent  who  made  the  contract 
in  his  own  name  was  acting  for  him."^  And  so  it  follows 
that  a  contract  made  between  A  and  B,  each  believing  the 
other  to  be  acting  in  his  own  behalf,  may  be  shown  to  be  a 
contract  between  P  and  X,  the  two  undisclosed  principals.^ 

Earlier  cases  which  held  that  only  the  promisee  in  the 
written  instrument  could  sue  upon  it/  must  be  regarded  as 
overruled  or  overwhelmed  by  later  decisions  which  proceed 
on  the  theory  that  the  nominal  promisee  (the  agent)  and 
the  real  promisee  (the  principal)  are  identical. 

§  123.     Parol  evidence  rule. 

It  is  now  settled  law  that  the  admission  of  parol  evidence 
to  show  that  a  written  contract  made  in  the  name  of  the 
agent  was  in  fact  made  in  behalf  of  an  undisclosed,  or 
if  disclosed,  unnamed  principal,  does  not   violate   the    rule 

questions  thus  suggested  upon  principle."     See  also  Watteau  v.  Fenwick, 
1893,  1  Q.  B.  346 ;  Hubbard  v.  Tenbrook,  124  Pa.  St.  291. 

1  Cothay  v.  Fennell,  10  B.  &  C.  671;  Taintor  u.  Prendergast,  3  Hill 
(N.  Y.),  72;  Eastern  R.  Co.  v.  Benedict,  5  Gray  (Mass.),  561.  For  an 
illustration  of  the  difficulty  of  establishing  this  doctrine,  see  Scriuishire 
V.  Alderton,  2  Str.  1182. 

2  Ford  V.  Williams,  21  How.  (U.  S.)  287;  Burton  v.  Goodspeed,  69 
111.  237. 

8  Darrow  v.  Ilorne  Produce  Co.,  57  Fed.  Rep.  463. 
*  United  States  v.  Parmele,  1  Paine  (U.  S.  C.  C),  252.     Cf.  Hunting- 
ton V.  Knox,  7  Cush.  (Mass.)  371. 


COXTKACT   FOR   UNDISCLOSED   rKINGirAL.  165 

against  the  admission  of  parol  evidence  to  vary  the  terms 
of  a  written  contract.^  "  Whatever  the  original  merits  of 
the  rule  that  a  party  not  mentioned  in  a  simple  contract  in 
writing  may  be  charged  as  principal  upon  oral  evidence, 
even  where  the  writing  gives  no  indication  of  an  intent  to 
bind  any  other  person  than  the  signer,  we  cannot  reopen  it, 
for  it  is  as  well  settled  as  any  part  of  the  law  of  agency."  ^ 
And  this  rule  extends  to  contracts  required  by  the  Statute 
of  Frauds  to  be  in  writing.^  This  rule  must  bo  viewed  in 
connection  with  these  qualifications :  (1)  that  parol  evidence 
is  not  admissible  to  introduce  into  a  sealed  instrument  or 
a  negotiable  instrument  a  party  not  named  or  described  in 
the  instrument;*  (2)  that  parol  evidence  is  not  admissible 
to  discharge  the  agent  from  liability  on  a  contract  made  in 
his  name,  for  "  to  allow  evidence  to  be  given  that  the  party 
who  appears  on  the  face  of  the  instrument  to  be  personally 
a  contracting  party,  is  not  such,  would  be  to  allow  parol 
evidence  to  contradict  the  written  agreement,  which  cannot 
be  done;"^  (3)  that  parol  evidence  is  not  admissible  to  con- 
tradict the  express  terms  of  a  written  instrument.^  Whether 
any  distinction  should  be  taken  between  a  case  where  there 
is  no  disclosure  of  the  principal  whatever,  and  a  case  where 
the  principal  is  disclosed  in  the  negotiation  but  not  named 
in  the  writing,  is  in  dispute.  It  is  contended  that  in  the 
latter  case  there  is  clearly  an  election  to  look  to  the  agent 
alone.'^  But  this  is  treated  as  a  question  of  fact  in  other 
jurisdictions.^ 

1  Ford  r.  Williams,  21  How.  (U.  S.)  287:  Huntington  v.  Knox,7  Cush. 
(Mass.)  371 ;  Darrow  i'.  Home  Produce  Co.,  57  Fed.  Rep.  463 ;  Wm. 
Lindeke  Laud  Co.  v.  Levy,  76  Minn.  364,  overruling  Powell  v.  Oleson,  32 
Minn.  288. 

2  Byiiigton  r.  Simpson,  134  Mass.  169. 

8  Lerned  v.  Johns,  9  Allen  (Mass.),  419;  Kingsley  v.  Siebrecht,  92 
Me.  23. 

*  Post,  §§  127-128,  134-135. 

5  Higgins  V.  Senior,  8  M.  &  W.  834. 

«  Humble  v.  Hunter,  12  Q.  B.  310. 

7  Chandler  v.  Coe,  54  N.  H.  561. 

8  Byington  v.  Simpson,  supra;  Calder  v.  Dobell,  L.  R.  6  C.  P.  486. 


166  PRINCIPAL    AND   THIRD   PAUTV. 

2.     Liahility  of  an  Undisclosed  Principal. 
§  124.     General  rule. 

Sul)ject  to  the  exceptions  hereafter  enumerated,  an  un- 
disclosed principal  is  liable  to  a  third  jierson  with  whom 
his  agent  has  dealt  within  the  scoj)e  of  the  agency  in  the 
same  way  and  to  the  same  extent  as  a  disclosed  principal, 
although  the  third  jierson  gave  exclusive  credit  to  the  agent 
su])posing  him  to  be  the  principal.^ 

This  does  not  rest  u])on  the  doctrine  of  "  holding  out  the 
agent,"  since  obviously  the  third  party  has  not  been  misled 
in  that  I'ospect.  It  rests  upon  the  anomalous  docti'ines 
already  explained,  and  has  been  comj)ared  to  the  liability 
of  a  dormant  partner  or  of  a  master  for  a  servant's  torts.^ 
Yet  the  doctrines  as  to  the  extent  of  an  agent's  powers  seem 
to  be  applied  to  the  agent  for  an  undisclosed  principal  in 
the  same  way  as  to  an  agent  of  a  disclosed  princi[)al.  "  Once 
it  is  established  that  the  defendant  was  the  real  j)rincipal, 
the  ordinary  doctrine  as  to  principal  and  agent  apjilies  — 
that  the  principal  is  liable  for  all  the  acts  of  the  agent 
which  are  within  the  authority  usually  confided  to  an  agent 
of  that  character,  notwithstanding  limitations,  as  between 
the  principal  and  the  agent,  put  upon  that  authority.  It  is 
said  that  it  is  only  so  where  there  has  been  a  holding  out 
of  authority  —  which  cannot  be  said  of  a  case  where  the 
person  supplying  the  goods  knew  nothing  of  the  existence 
of  a  principal.  But  I  do  not  think  so.  Otherwise,  in  every 
case  of  undisclosed  principal,  or  at  least  in  every  case  where 
the  fact  of  there  being  a  principal  was  undisclosed,  the  secret 

^  Thomson  v.  Davenport,  9  B.  &  C.  78;  Kayton  v.  Barnett,  116  N.  Y. 
025;  Ilubburd  v.  Tonbrook,  124  Pa.  St.  291  ;  Schendel  v.  Stevenson,  153 
]\Iass.  351;  Watteau  v.  Fenwick,  1893,  1  Q.  B.  .'VIO;  Levitt  r.  Ilamblet, 
1901,  1  K.  B.  53. 

^  Watteau  v.  Fenwick,  supra.  See  the  suggestion  in  IJyington  v.  Simp- 
son (134  Mass.  109),  that  the  liability  of  an  undisclosed  princii)al  lesls 
upon  considerations  similar  to  those  which  fix  a  master's  liability  for  the 
torts  of  his  servant,  —  considerations  which,  ia  this  case,  escape  the  doc- 
trines of  estoppel  as  to  the  fact  of  the  agency,  although,  apparently,  not 
as  to  its  extent. 


CONTRACT    FOR    UNDISCLOSKD    rillNClPAL.  107 

limitation  of  authority  would  prevail  and  defeat  the  action 
of  the  person  dealing  with  the  agent  and  then  discovering 
that  he  was  an  agent  and  had  a  principal."  ^  It  api)ears, 
therefore,  first,  that  an  undisclosed  principal  is  liable  upon 
a  contract  made  by  his  agent  because  the  agent's  act  is  the 
act  of  the  principal  or  the  agent's  name  has  been  adopted 
by  the  principal  for  the  purpose  of  the  contract,  and,  second, 
that  having  fictionally  established  the  privity  in  this  fashion, 
the  law  goes  on  to  ap{)ly  the  usual  doctrines  of  ageucy  in 
ord':'r  to  determine  the  extent  of  the  agent's  authority.  It 
is  obvious,  however,  that  this  is  all  sheer  assumption  and 
that  there  can  be  in  such  a  case  no  real  basis  for  estoppel. 

To  the  general  rule  of  liability  there  are,  however,  certain 
well  defined  exceptions  or  qualifications  which  must  now  be 
noticed. 

§  125.     First  exception.  —  State  of  accounts. 

The  right  of  the  third  person  to  proceed  against  the  un- 
disclosed principal  is  subject  to  the  state  of  accounts  between 
the  principal  and  agent.  The  exact  nature  and  extent  of 
this  exception  is,  however,  involved  in  some  uncertainty. 

(1)  Origin  of  the  doctrine.  The  leading  case  on  this  sub- 
ject is  Thomson  v.  Bavenport^^  where  the  dictum  was  pro- 
nounced that,  "  if  a  person  sells  goods  (supposing  at  the 
time  of  the  contract  he  is  dealing  with  a  principal),  but 
afterwards  discovers  that  the  person  with  whom  he  has 
been  dealing  is  not  the  principal  in  the  transaction,  but 
agent  for  a  third  person,  though  he  may  in  the  meantime 
have  debited  the  agent  with  it,  he  may  afterward  recover 
the  amount  from  the  real  principal ;  subject,  however,  to 
this  qualification,  that  the  state  of  the  account  between  the 
principal  and  the  agent  is  not  altered  to  the  prejudice  of 
the  principal."  This  dictum  was  said  to  be  too  broad  in 
Heald  V.  Kemoorthy^  and   the  doctrine    was  there  declared 

1  AVatteau  v.  Fenwick,  supra,  per  Wills,  J.  See  criticism  in  9  Law  Q. 
Rev.  111. 

-  9  Barn.  &  Cress.  78,  86;  2  Smith's  Leading  Cases. 
3  10  Ex.  739. 


168  riiiNCirAi.  and  tiiikd  takty. 

tube  that,  "if  the  conduct  of  the  seller  [the  tliinl  person] 
would  make  it  unjust  for  him  to  call  upon  the  buyer  for 
the  money;  as,  for  example,  where  the  jjrincipal  is  induced 
by  the  conduct  of  the  seller  to  pay  his  agent  the  money  on 
the  faith  that  the  agent  and  seller  have  come  to  a  settle- 
ment on  the  matter,  or  if  any  representation  to  that  effect 
is  made  by  the  seller,  either  by  words  or  conduct,  the  seller 
cannot  afterwards  throw  off  the  nuisk  and  sue  the  princi- 
pal." In  a  later  English  case  ^  a  distinction  was  drawn 
between  the  case  where  the  existence  of  a  principal  is 
wholly  undisclosed,  and  the  agent  contracts  as  principal, 
and  the  case  where  the  existence  of  a  principal  is  disclosed, 
but  the  principal  is  unnamed  and  unknown  ;  the  doctrine  of 
Thomson  v.  Davenport  being  held  applicable  to  the  first 
state  of  facts,  and  the  doctrine  of  Ileald  v.  Kenivorthy  to 
the  second.  But  in  Irvine  v.  Watsoii^^  this  distinction  is 
said  to  be  "difficult  to  understand,"  and  the  doctrine  of 
Heald  V.  Kenivorthy  is  expressly  approved.  The  contro- 
versy therefore  is  as  to  whether  settlement  in  good  faith 
by  the  principal  with  the  agent  will  discharge  the  {)rincii)al, 
or  whether  the  settlement  must  have  been  in  reliance  upon 
such  conduct  on  the  i)art  of  the  third  person  as  will  work 
an  estoppel  against  the  latter. 

(2)  English  doctrine.  The  English  doctrine  now  is  that 
the  principal  is  discharged  from  liability  to  the  third  person 
only  where  the  third  person  has  by  his  conduct  led  the  prin- 
cipal to  believe  that  there  has  been  a  scttlenifnt  l)etween  the 
third  person  and  the  agent,  or  that,  with  knowledge  of  the 
principal's  liability,  the  third  person  elects  to  give  credit 
exclusively  to  the  agcnt.-^  In  other  words  the  principal 
must  show  that  the  third  person  is  by  positive  conduct 
estopped  to  claim  recourse  against  the  principal. 

(3)  American  doctrine.  The  doctrine  in  the  United 
States   seems  to   have  followed   the   dictum  in    Thomson  v. 

1  Armstrong  v.  Stokes,  L.  11.  7  Q.  B.  598. 

2  L.  R.  5  Q.  R.  Div.  414. 

3  Irvine  r.  Watson,  supm ;  Davison  r.  Donaldson,  L.  R.  9  Q.  B.  Div. 
623 ;  Pollock  ou  Cont.  (Gtli  ed.)  99. 


CONTRACT   FOR   UNDISCLOSED    PRINCIPAL.  169 

Davenport.  The  principal  is  said  to  be  discharged  where 
he  has  in  good  faith  paid  the  agent  or  made  such  a  change 
in  the  state  of  the  account  between  the  agent  and  himself 
that  he  would  suffer  loss  if  he  should  be  compelled  to  pay 
the  seller.^  In  other  words  mere  delay  on  the  jiart  of  the 
third  person  may  prejudice  the  principal  and  work  an 
estoppel  without  other  and  positive  conduct. 

§  126.     Second  exception.  —  Election  to  hold  agent. 

Where  the  third  party,  after  discovering  the  principal, 
unequivocally  elects  to  regard  the  agent  as  the  sole  respon- 
sible contracting  party,  he  cannot  afterwards  proceed  against 
the  principal.^  What  constitutes  a  final  or  unequivocal  elec- 
tion is  a  question  of  fact,  though  the  conduct  may  be  so 
decisive  as  to  establish  an  election  in  point  of  law,  or  so 
indecisive  as  to  render  unwarranted  a  finding  that  there 
was  an  election.  Bringing  an  action  against  the  agent  has 
an  evidential  force,  but  does  not  necessarily  constitute  an 
election.^  It  is  generally  held  that  an  unsatisfied  judgment 
is  not  conclusive  proof  of  an  election;*  though  the  ruling 
is  otherwise  in  England  and  some  of  our  States.^  Proving 
a  claim  in  bankruptcy  is  not  conclusive.®  Nor  taking  the 
agent's  promissory  note." 

It  has  been  held  that  where  at  the  time  the  contract  is 
made   the   third    party   knows  the   principal,  but   accepts  a 

1  Fradley  v.  Hyland,  37  Fed.  Rep.  49;  Thomas  v.  Atkinson,  38  Ind. 
248;  Laing  v.  Butler,  37  Hun  (N.  Y.),  144;  Knapp  v.  Simon,  96  N.  Y. 
284;  Story  on  Agency,  §  449  ;  23  Am.  Law  Rev.  565. 

2  Addison  c.  Gandasequi,  4  Taunt.  574;  Paterson  v.  Gandasequi,  15 
East,  62;  Kingsley  v.  Davis,  104  Mass.  178;  Kendall  r.  Hamilton,  L.  R. 
4  App.  Cas.  504. 

3  Cobb  V.  Knapp,  71  N.  Y.  348 ;  Steele  Smith  Grocery  Co.  v.  Potthast, 
109  Iowa,  413;  Curtis  v.  Williamson,  L.  R.  10  Q.  B.  57. 

4  Beymer  v.  Bonsall,  79  Pa.  St.  298;  Maple  r.  R.  Co.,  40  Oh.  St.  313 ; 
Brown  v.  Reiraan,  48  N.Y.  App.  Div.  295. 

5  Pollock  on  Cont.  (6th  ed.)  100,  citing  Priestley  v.  Feruie,  3  11.  &  C. 
977;  King.sley  v.  Davis,  supra. 

6  Curtis  ;-.  Williamson,  L.  R.  10  Q.  B.  57. 

T  Merrill  v.  Kenyon,  48  Conn.  314  ;  Pentz  v.  Stanton,  10  Wend.  (N.  Y.) 
271 ;  Harper  v.  Tiffin  N.  B.,  54  Oh.  St.  425. 


170  ntlNCIPAL   AND   TIIIUIi    PARTY. 

written  instnmu'iit  in  the  name  of  the  agent,  he  makes 
an  election  to  h)ok  to  the  agent  alone,  and  parol  evi- 
dence is  inadmissible  to  charge  the  jjrincipal.^  iJut  this  is 
doubtful.^ 

It  is  held  in  England  that  a  foreign  princi|)al  cannot  sue  or 
be  sued  on  a  contract  made  by  his  agent  in  EnglanJ  unless  it 
clearly  appears  that  the  agent  was  authorized  to  make  iiis 
principal  a  party  and  that  the  principal,  and  not  the  agent, 
was  intended  to  be  the  contracting  party.-"^  It  is  j)resumcd 
that  the  third  party  gives  credit  exclusively  to  the  agent 
in  such  a  case.  In  the  United  States  it  is  held  ihat  there 
is  no  such  presumption,  and  the  question  whether  exclusive 
credit  is  given  to  the  agent  is  one  of  fact.* 

§  127.     Third  exception.  —  Contract  under  seal. 

Where  the  contract  between  the  agent  and  third  party 
is  under  seal  (the  seal  not  being  merely  superfluous),  the 
principal  is  not  liable.  It  is  a  strict  rule  of  the  common 
law  that  only  the  parties  named  or  described  in  a  sealed 
instrument  can  sue  or  be  sued  upon  it.^  This  rule  involves 
the  question  as  to  the  form  in  which  an  agent  should  exe- 
cute a  sealed  instriunent  in  order  to  bind  his  principal. 
Where  one  partner  (A.  B.)  under  a  power  of  attorney  from 
the  other  (C.  D.)  executed  a  scaled  instrument,  "  A.  B." 
"  For  C.  D.,  A.  B."  it  was  held  that  C.  D.  was  bound.^  But 
where  the  trustees  of  a  church  executed  a  sealed  instru- 
ment, "  A.  B.,  C.  D.,  and  E.  F.,  trustees  of  the  Baptist  Ciiurch 
of  R,"  it   was  held  that  the   church   was   not  bound."     The 

1  Chandler  v.  Coe,  54  N.  II.  5G1. 

2  Byington  v.  Simpson,  134  Mass.  1G9  ;  Merrill  r.  Kenyoii,  48  Conn. 
.314 ;  Calder  v.  Dobell,  L.  11.  6  C.  P.  480. 

3  Die  Ell)inj;«n-  Actien-GeselLschaft  v.  Claye,  L.  11.  8  Q.  B.  313;  Ilut- 
ton  V.  Bulloch,  L.  II.  0  Q.  H.  572. 

4  Kirkpatrick  v.  Stainer,  22  Wend.  (N.  Y.)  244;  Kaiilbiuk  v.  Church- 
ill, 59  N.  II.  296;  poxt,  §  187.. 

5  Post,  §  188;  Briggs  v.  Partridge,  64  N.  Y.  357;  Borcherling  r.  Katz, 
37  N.  J.  Eq.  150;  lie  Pickering's  Claim,  L.  R.  6  Ch.  App.  525. 

8  Wilks  V.  Back,  2  East,  142;  Mnssey  v.  Scott,  7  Cush.  (Mass.)  215; 
McDaniels  r.  Flower  Brook  Mfg.  Co.,  22  Vt.  274. 
'  Taft  V.  Brewster,  9  Johns.  (N.  Y.)  334. 


^ 


CONTllACT    FOR    UNDISCLOSED    PRINCIPAL.  171 

recitals  of  the  instrument,  and  particularly  of  the  attesta- 
tion clause,  and  the  manner  of  the  signing,  must  determine 
whether  the  instrument  is  the  obligation  of  the  principal 
or  of  the  agent.^  Where  an  instrument  is  executed  iu 
behalf  of  the  government,  and  the  fact  clearly  appears  by 
the  recitals,  but  the  agent  atlixes  his  own  name  and  seal, 
the  government  is  bound  and  not  the  agent.'-^  But  the 
agent  of  a  private  principal  must  execute  the  instrument 
in  the  name  of,  or  on  behalf  of,  his  principal  in  order  to 
bind  the  latter.^  The  rule  applies  equally  to  a  principal 
who  is  disclosed  in  the  negotiations  but  whose  name  and 
seal  are  not  effectively  affixed  to  the  instrument. 

In  those  states  in  which  the  statutes  have  made  a  seal 
unnecessary  to  the  validity  of  a  deed,  the  courts  nevertheless 
treat  the  deed  as  a  sealed  instrument  so  far  as  concerns  the 
rule  that  an  undisclosed  principal  can  neither  sue  nor  be 
sued  upon  it.* 

§  128.     Fourth  exception.  —  Negotiable  instrument. 

Only  the  party  whose  name  appears  as  the  obligor  on  a 
negotiable  instrument  can  be  sued  upon  it.  Parol  evidence 
is  therefore  inadmissible  to  charge  an  undisclosed  or  unnamed 
principal  upon  such  an  instrument.^  But  if  there  be  an  am- 
biguity on  the  face  of  the  paper  as  to  whether  the  principal 
or  agent  is  intended  to  be  bound,  parol  evidence  is  admissible 
to  remove  the  ambiguity.** 

1  Stinchfield  v.  Little,  1  Me.  231 ;  Elwell  v.  Shaw,  16  Mass.  42 ;  North- 
western DistilUng  Co.  r.  Brant,  G9  111.  6.jS;  Philadelphia,  &c.  K.  v.  How- 
ard, 13  How.  (U.  S.)  307;  Bradstreet  v.  Baker,  U  R.  I.  546. 

-  Hodgson  V.  Dexter,  1  Cranch  (U.  S.),  345 ;  Dawes  v.  Jackson, 
9  Mass.- 490;  Sheffield  v.  Watson,  3  Caines  (N.  Y.),  69;  post,  §  203. 

3  The  English  Conveyancing  Act  (44  &  45  Vict.  c.  41)  provides  (§  46) 
that  a  deed  executed  in  the  name  of  the  donee  of  a  power  of  attorney,  by 
the  authority  of  the  donor  of  the  power,  shall  be  as  effectual  as  if  exe- 
cuted in  the  name  of  the  donor. 

*  Sanger  v.  Warren,  91  Tex.  472. 

5  Bradlee  v.  Boston  Glass  Manufactory,  16  Pick.  (^Mass.)  347;  Sparks 
V.  Dispatch  Transfer  Co.,  101  Mo.  531  ;  Ducarrey  v.  Gill,  M.  &  M.  450. 

6  Reeve  r.  First  N.  B.,  54  N.  J.  L.  208;  Beau  v.  Pioneer  Mining  Co., 
66  Cal.  451. 


172  PRINCIPAL   AND    THIRD    PARTY. 

Whether  the  signature  is  that  of  the  principal  or  that  of 
the  agent  must  be  determined  by  considering  the  recitals  of 
the  instrument,  the  marginal  headings,  and  the  form  of  the 
signature  itself.  The  construction  of  signatures  to  negoti- 
able instruments  is  fully  discussed  in  a  subsequent  cha{)ter.^ 

It  seems,  however,  that  the  third  party  may  disregard  the 
negotiable  instrument  and  proceed  against  the  undisclosed 
principal  uj)un  the  common  counts  or  original  consideration.''^ 

o.    liiylits  of  an   Undisclosed  Principal. 
§  129.     General  rule. 

Subject  to  the  exceptions  and  qualifications  hereafter  enu- 
merated, an  undisclosed  princii)al  may  bring  an  action  in 
his  own  name  upon  contracts  made  by  his  agent  in  his  behalf, 
although  the  third  party  supposed  that  he  was  dealing  with  the 
agent  as  principal.^  This  rule  is  said  to  be  the  necessary  cor- 
ollary of  the  one  which  gives  the  third  persona  right  of  action 
against  the  undisclosed  principal,  since  mutuality  of  remedial 
rights  is  clearly  just.  It  follows  that  two  undisclosed  princi- 
pals may  contract  through  their  respective  agents,  and  that  the 
contract  will  give  to  each  (subject  to  the  enumerated  exceptions) 
the  same  rights  and  liabilities  as  if  they  had  been  disclosed 
principals  or  had  contracted  in  person.^  The  rule  is  appli- 
cable to  del  credere  agencies  as  well  as  to  ordinary  agencies.^ 
This  right  of  the  principal  is  superior  to  the  right  of  the 
agent,  and  when  the  principal  has  once  given  notice  of  his 
intention  to  exercise  it,  the  third  party  will  settle  with  the 
agent  at  his  peril.^  If  the  contract  be  in  writing  (not  under 
seal  or  negotiable),  it  does  not  violate  the  rule  against  vary- 

1  Post,  §§  180-195. 

2  Pentz  V.  Stanton.  10  Wend.  (X.  Y.)  271;  Harper  v.  Tifiin  X.  15.,  .")4 
Oh.  St.  425. 

8  Norfolk  V.  Wortliy,  1  Camp.  337;  Sadler  v.  Leigh,  4  Camp.  195; 
Spurr  V.  Cass,  L.  R.  5  il.  B.  C5G;  Huntington  v.  Knox,  7  Cusli.  (Mass.) 
371;  Taintor  r.  Prendergast,  3  Hill  (X.  y.),72;  Talcott  r.  Wabash  11., 
150  N.  Y.  461  ;  Barhani  v.  Bi-ll,  112  X.  C.  131. 

*  Darrow  v.  Home  Produce  Co.,  57  Fed.  Rep.  463. 

5  Hornby  v.  Lacy,  6  M.  &  S.  166. 

*^  Pitts  V.  Mower,  18  Me.  361 ;  Huntington  v.  Knox,  supra;  post,  §  208. 


CONTRACT    FOR    UNDISCLOSED    PRINCIPAL.  173 

ing-  the  terms  of  written  instruments  by  parol  to  admit  parol 
evidence  for  tlie  purpose  of  showing  tlie  real  principal.^  But 
it  would  vary  the  instrument  to  admit  parol  evidence  to 
discharge  the  agent.^ 

§  130.     First  exception.  —  State  of  accounts. 

The  right  of  the  undisclosed  i)rincipal  to  sue  the  third 
party  is  subject  to  the  equities  and  the  state  of  the  accounts 
existing  l)etwcen  the  agent  and  the  third  party  at  the  time 
the  right  is  asserted.  In  other  words  the  principal  cannot 
assert  his  rights  without  leaving  to  the  third  party  exactly  the 
same  rights  as  if  the  agent  had  been  in  fact  the  principal.^ 
The  cases  applying  this  doctrine  have  been  mainly  those 
where  the  agent  sold  goods  in  his  own  name,  and  under  these 
circumstances  the  distinction  is  made  between  the  case  where 
the  agent  has  possession  of  the  goods,  and  where  he  has  not. 
In  the  former  case  the  right  of  set-off  which  might  be  asserted 
against  the  agent  may  be  asserted  against  the  undisclosed 
principal  ;  in  the  latter  case  it  may  not.*  But  the  doctrine 
is  equally  applicable  to  contracts  other  than  those  for  the  sale 
of  goods.^ 

The  doctrines  under  this  head  resolve  themselves  into  a 
general  doctrine  of  estoppel.  When  the  principal  by  his 
conduct  leads  third  persons  to  believe  that  the  agent  is  the 
principal,  the  real  principal  is  estopped  from  asserting  against 
such  third  persons  any  claims  to  their  prejudice.  Thus  if  the 
third  person  has  paid  the  agent,^  or  has  a  right  of  set-off 
against  him,'  the   principal  cannot  enforce  his  claim  to  the 

^  Darrow  i\  Home  Produce  Co.,  supra;  ante,  §  123. 

2  Post,  §  197. 

8  Rabone  v.  Williams,  7  T.  R.  360  n. ;  George  v.  Clagett,  7  T.  R.  359  ; 
IMontagu  v.  Forwood,  1893,  L.  R.  2  Q.  B.  350 ;  Gardner  c.  Allen,  6  Ala. 
187;  Peel  r.  Shepherd,  58  Ga.  3G5;  Taintor  v.  Prendergast,  3  Plill 
(N.  Y.),  72. 

*  Bernshouse  r.  Abbott,  45  N.  J.  L.  531. 

^  INIontagu  v.  Forwood,  supra. 

^  Coates  r.  Lewes,  1  Camp.  44i ;  Ramazotti  v.  Bowring,  7  C.  B.  n.  s. 
851. 

■^  Borries  v.  Imperial  Ottoman  Bank,  L.  R.  9  C.  P.  38;  Montagu  v. 
Forwood,  1893,  2  Q.  B.  350;  Stebbins  v.  Walker,  46  Mich.  5. 


174  rRINCU'AI-    AND    THIRD    rAUTV. 

prejudice  of  such  paymeut  or  right  of  set-off. ^  But  if  before 
such  payment  is  made  or  such  right  of  set-off  accrues  the 
third  person  has  received  notice  that  tlic  agent  was  not  in 
fact  tlie  principal,  then  he  has  not  been  misled  and  cannot 
elaim  an  estoppel.^  The  state  of  the  third  person's  niiud  is 
the  important  inquiry.  Did  he  or  did  he  not  know  that  the 
aiient  was  not  the  real  principal  ?  It  seems  that  mere  means 
of  knowledge  will  not  be  equivalent  to  notice.^  But  if  the 
third  person  knew  that  the  agent  was  contracting  as  agent, 
although  he  did  not  know  whose  ageut,  he  caunot  claim  an 
estoppel  against  the  priucipal.-^  And  it  is  even  held  that  if 
the  agent  is  one  who  commonly  contracts  for  undisclosed 
principals,  though  also  for  himself,  the  third  person  cannot 
assume  that  the  agent  is  contracting  for  himself,  and  would 
not  therefore  be  entitled  to  a  set-off  as  against  the  undisclosed 
principal.^ 

Where  an  agent  contracting  as  principal  sells  his  principal's 
goods  and  also  his  own  in  one  contract,  the  principal  cannot 
sever  the  contract  and  maintain  a  separate  suit  for  the  value 
of  his  own  goods.^ 

Payment,  or  an  allowance  by  way  of  set-off,  to  an  agent 
who  iias  a  lien  on  the  goods  of  his  undisclosed  principal,  is 
binding  on  the  principal.'^ 

§  131.     Second    exception.  —  Estoppel. 

Analogous  to  the  doctrine  of  the  preceding  section  is  the 
rule   that   where    the    principal   invests   his   agent  with   the 

1  Pollacck  c.  Scholl,  51  X.  Y.  App.  Div.  319. 

-  Mildred  v.  Maspons,  S  App.  Cas.  874;  Kaltenbach  v.  Lewis,  10  App. 
Cas.  617;  Henderson  v.  McNally,  48  N.  Y.  App.  Div.  134;  Rice,  &c.  Co. 
V.  Bank,  185  111.  422;  Belfield  v.  National  Supply  Co.,  189  Pa.  St.  189. 

8  Borries  v.  Imperial  Ottoman  Bank,  L.  R.  9  C.  P.  38. 

4  Ilsley  V.  Merriam,  7  Cush.  (Mas.s.)  242;  Evans  v.  Wain,  71  Pa.  St. 
G9 ;  Seraenza  v.  Brinsley,  18  C.  B.  n.  s.  467. 

6  Baxter  v.  Sherman,  73  Minn.  434;  Miller  v.  Lea,  35  ]\Id.  396;  Cooke 
jj.  Eshelby,  12  App.  Cas.  271.  See  criticism  on  this  doctrine  in  3  Law  Q. 
Rev.  358;  and  see  Hogan  v.  Shorb,  24  Wend.  (N.  Y.)  458,  462,  and 
Wright  V.  Cabot,  89  N.  Y.  570. 

6  Roosevelt  v.  Doherty,  129  Mass.  301. 

'  Warner  v.  M'Kay,  1  M.  &  W.  591 ;  Hudson  v.  Granger,  5  B.  &  A.  27. 


CONTRACT    FOR    UNDISCLOSED    PRINCIPAL.  175 

indicia  of  ownership  of  goods,  and  lluis  holds  out  the  agent  as 
owner,  he  is  estopped  as  against  those  who  (hjal  with  the 
agent  as  owner  to  set  up  liis  own  claim  or  title. ^  So,  in  any 
case,  where  the  principal  has,  by  representing  the  agent  to  be 
the  principal,  or  by  standing  by  and  allowing  innocent  third 
persons  to  deal  with  the  agent  as  principal,  induced  such 
innocent  third  persons  to  change  their  legal  relations  in  such 
a  way  as  to  make  it  incciuitable  for  the  principal  to  claim  the 
rights  of  an  undisclosed  principal,  he  will  l)e  estopped  from 
maintaining  an  action  in  his  own  namc.^  Perhaps  this  ex- 
ception is  only  an  extension  of  the  previous  one.  In  that  the 
})rincipal  is  estopped  to  press  his  rights  to  the  extent  that  the 
third  person  would  be  injured  ;  in  this  it  is  assumed  that  he 
cannot  press  his  rights  at  all  without  injury  to  the  third 
person. 

§  132.     Third  exception.  —  Exclusive  credit  to  agent. 

Where  the  third  person  has  clearly  expressed  his  intention 
to  deal  with  the  agent  as  principal,  or  where  he  has  dealt  with 
the  agent  on  terms  of  trust  and  confidence,  or  the  nature  of 
the  contract  is  fiduciary,  the  undisclosed  principal  cannot 
claim  the  benefits  of  the  contract.  "  Every  man  has  a  right 
to  elect  what  parties  he  will  deal  with.  .  .  .  And  as  a  man's 
right  to  refuse  to  enter  into  a  contract  is  absolute,  he  is  not 
obliged  to  submit  the  validity  of  his  reasons  to  a  court  or 
jury."^  The  intention  to  deal  only  with  the  agent  maybe 
found  in  the  recitals  of  the  written  contract,^  or  the  negotia- 
tions attending  an  oral  one.^  In  the  first  case  the  question 
would  be  one  of  construction  for  the  court ;  in  the  latter,  of 
fact  for  the  jury.  The  intention  may  be  further  inferred  from 
the  executory  nature  of  the  contract,  or  where  it  is  fiduciary, 

1  Posit,  §  170. 

2  Ferrand  v.  Rischoffsheim,  4  C.  B.  N.  s.  710,  716;  Stebbins  v.  'Walker, 
46  Mich.  5;  Pollock  on  Cont.  (6th  ed.)  98. 

8  Winchester  r.  Howard,  97  Mass.  303 ;  Humble  v.  Hunter,  12  Q.  B. 
810.     Cf.  Boston  Ice  Co.  v.  Potter,  123  Mass.  28. 
*  Humble  v.  Hunter,  supra. 
^  Winchester  v.  Howard,  supra. 


176  rUINCIPAL    AND    TIllKK    PARTY. 

or  for  personal  skill  or  service.^  But  in  the  latter  case  it 
would  seem  that  if  the  agent  has  personally  discharged  the 
trust  or  performed  the  service,  his  undisclosed  princii)al  may 
recover  the  com[)ensation.- 

§  133.     Fourth  exception.  — Varying  written  instrument. 

Where  in  a  written  instrument  the  agent  has  rei)rescnted 
himself  in  express  terms  or  recitals  as  tiie  real  and  only 
principal,  the  undisclosed  principal  cannot  maintain  an  action 
in  his  own  name,  since  parol  evidence  would  l)e  inadmissible 
to  vary  the  express  terms  and  recitals  of  the  written  instru- 
ment or  to  deprive  the  third  person  of  the  benefit  he  contem- 
plated from  the  character,  credit,  and  substance  of  the  one  with 
whom  he  contracted.^  This  is  the  result  of  a  rule  of  evidence 
merely.  But  where  the  real  princii)al  re])resents  himself 
as  agent  for  an  midisclosed  principal,  he  may  afterwards 
assume  his  real  character  and  sue  as  princijial,  since  in  such 
a  case  the  third  party  has  not  relied  upon  the  character,  credit, 
oi-  substance  of  any  person  other  than  the  agent.^ 

§  134.     Fifth  exception.  —  Sealed  instrument. 

Where  a  sealed  instrument  names  the  agent  alone  as  the 
obligee,  the  principal  cannot  maintain  an  action  upon  it  in  his 
own  name,  owing  to  the  technical  rule  that  only  the  parties 
named  or  described  in  a  sealed  instrument  can  sue  or  be 
sued  upon  it.^     He  must  proceed  in  the  name  of  the  agent. 

§135.     Sixth  exception. —Negotiable  instrument. 

Only  the  party  named  as  payee  in  a  negotiable  instrument 
can  sue  upon  it.^     This  is  due  to  the  technical  rule  of  tlie  law 

1  Pollock  on  Cont.  (Gth  ed.)  97;  Eggleston  r.  Boardman,  37  Mich.  U; 
Kelly  V.  Thuey,  102  Mo.  522. 

2  Warder  v.  White,  14  111.  App.  .50,  citing  Grojan  iv  Wade.  2  Staikie, 
44.3;  King  v.  Batterson,  13  R.  T.  117;  Sullivan  r.  Shailer,  70  Conn.  733. 

8  Hunjble  v.  Hunter,  12  Q.  B.  310;  Darrow  v.  Home  Produce  Co.,  57 
Fed.  llcp.  463. 

*  Schmaltz  v.  Avery,  10  Q.  B.  055. 

6  Shack  V.  Anthony,  1  M.  &  S.  573;  Violett  v.  Powell,  10  B.  Mon. 
(Kv.)  347;  post,  §  188. 

6  Cocke  V.  Dickens,  4  Yerg.  (Tenn.)  2Q;  Grist  v.  Backhouse,  4  Dev. 


CONTRACT   FOR   UNDISCLOSED   PRINCIPAL.  177 

merchant  which  coMfines  the  rights  and  liabilities  upon  nego- 
tiable instruments  to  the  parties  named  or  described  therein. 
But  if  there  be  any  ambiguity  on  the  face  of  the  instrument  as 
to  who  is  intended  to  be  the  payee,  parol  evidence  is  admis- 
sible to  remove  the  ambiguity.  And,  unlike  the  case  of  the 
maker,  drawer,  or  acceptor,  the  addition  of  a  descriptive  term 
like  "agent,"  "treasurer,"  "cashier,"  etc.,  is  now  generally 
held  to  create  such  an  ambiguity.^  The  same  reason  docs  not 
exist  for  forbidding  a  person  not  named  as  payee  to  sue  as  for 
forbidding  a  person  not  named  as  payor  to  be  sued,  namely, 
that  certainty  is  required  as  to  the  obligors  on  negotiable  in- 
struments in  order  that  such  instruments  may  circulate  freely. 
Accordingly  the  technical  rule  forbidding  an  unnamed  payee 
to  sue  lias  dwindled  to  narrow  limits,  and  has  in  some  cases 
been  abandoned  altogether.^ 

&  Battle  (X.  C),  362;  Moore  v.  Penn,  5  Ala.  135;  United  States  Bk.  v. 
Lyman,  1  Blatchf.  (U.  S.  C.  C.)  297 ;  s.  c.  2  Fed.  Cas.  709. 

1  Baldwin  r.  Bank,  1  Wall.  (U.  S.)  234;  Commercial  Bank  v.  French, 
21  Pick.  (Mass.)  486;  Nichols  v.  Frothingham,  45  Me.  220;  Nave  v.  First 
Nat.  Bk.,  87  Jnd.  204. 

2  McConnell  v.  East  Point  Land  Co.,  100  Ga.  129;  post,  §  207. 


12 


i. 


178  PRINCU'AL   AND    TllIKD    I'AUTY. 


CHAPTER  XL 

ADMISSIONS    AND    DECLARATIONS   OF   THE   AGENT. 

§  136.     Object  ill  proving  admissions  of  agent. 

The  admissions  or  declaration.s  of  ail  agent  may  be  sought  to 
be  offered  in  evidence  against  the  j>rincipal  for  any  one  of  tliree 
])urposes  :  (1)  To  establish  ilie  fact  of  tlie  agency  ;  (2)  to  estab- 
lish the  nature  or  extent  of  the  authority  ;  (3)  to  establish  the  ex- 
istence or  non-existence  of  some  fact  (other  than  the  two  named 
above)  which  is  material  to  the  issue  in  controversy  between 
the  parties.  The  competency  of  the  admission  or  declaration 
will  depend  in  the  first  instance  upon  the  i)urpose  for  wliidi  it 
is  offered,  and  secondarily  upon  the  relation  of  the  admission 
or  declaration  to  the  transaction  in  (luestion  and  the  general 
scope  of  the  agency.  It  is  incompetent  for  either  of  the  first  two 
pur|)oscs  named  above,  but  may  be  competent  for  the  third. 

§  137.     When  alw^ays  inadmissible. 

The  admissions  or  declarations  of  an  agent  cannot  be  given 
in  evidence  against  the  principal,  eitiier  (1)  to  establish  the 
fact  of  the  agency,  or  (2)  to  establish  the  nature  or  extent  of 
the  authority.^  The  reason  is  obvious.  The  declaration 
of  the  agent  that  he  is  agent,  or  that  he  has  certain  dele- 
gated powers,  is  merely  an  attempt  to  clothe  himself  with 
authority,  and  has  no  tendency  to  prove  that  he  possesses  in 
fact  the  authority  wliich  he  claims.  He  is  holding  himselt' 
out  as  agent,  whereas  the  requirement  is  that  the  principal 
should  liold  him  out  as  agent  in  order  to  work  an  estoj){)el 
against  the  principal.  It  is  therefore  error  to  admit  evidence 
of  wiiat  the  agent  has  said  as  to  his  own  powers  in  an  action 
to  liold  the  principal,  and  the  error  is  not  cured  by  a  charge  to 

^  Hatch  V.  Squires,  11  Mich.  1S5;  Howe  IMacliiiie  Co.  v.  (lark,  15 
Kaiis.  102;  Bn^hani  /•.  Peters,  1  (iiay  (Ma.ss.),  \-VJ;  .Mitclium  r.  Diiiilap, 
08  Mo.  418;  Buller  v.  C,  B.  &  Q.  Ry.  Co.,  67  Iowa,  206. 


ADMISSIONS   BY   AGENT.  179 

the  jury  that  the  agency  cannot  be  proved  by  the  agent's  own 
decLarations,  and  it  is  even  doubtful  whether  the  withdrawing 
of  sucli  evidence  from  the  consideration  of  the  jury  would  cure 
the  error.i  Since  his  express  declarations  are  incompetent  to 
prove  his  authority,  a  fortiori  his  conduct  is  incompetent. 
It  is  therefore  improper  to  charge  a  jury  that  they  may  find 
the  fact  of  the  agency  or  of  the  authority  if  the  conduct  of  the 
agent  was  such  as  to  lead  the  third  party  to  believe  that  he 
was  authorized.^  It  is  the  conduct  of  the  principal  and  not  of 
the  agent  from  which  authority  nmst  be  inferred. 

This  is  far  from  saying,  however,  that  an  agent  is  an  incom- 
petent witness  to  prove  the  fact  of  the  agency  or  authority. 
Wliere  parol  evidence  as  to  the  existence  of  tlie  agency  or  ex- 
tent of  the  authority  is  admissible  at  all,  the  agent  is  as  com- 
petent a  witness  as  any  other  person  to  testify  under  oath  to 
facts  within  his  knowledge  touching  the  agency .^  Even  the 
old  rule  of  evidence  which  excluded  the  testimony  of  a  party 
in  interest  made  an  exception  in  favor  of  the  evidence  of  an 
agent  produced  to  prove  the  fact  of  the  agency.*  And  this 
applies  equally  where  a  husband  is  the  agent  of  his  wife  or  a 
wife  of  her  husband.^  But  if  the  authority  be  conferred 
in  writing,  parol  evidence  of  any  kind  is  generally  inadmis- 
sible,^ unless  it  be  where  the  question  of  authority  is  only 
incidentally  involved.'^ 
/  A  confidential  communication  or  report  from  the  agent  to 
'  his  principal  cannot  be  used  as  evidence  against  the  piincipal 
by  third  persons.^ 

^  Comegys  r.  American  Lumber  Co.,  8  Wash.  661. 

■^  Leu  V.  Mayer,  .52  Kans.  419. 

8  Indianapolis  Chair  Mfg.  Co.  v.  Swift,  132  Ind.  197;  Rice  v.  Gove,  22 
Pick.  (Mass.)  158. 

*  1  Greeiileaf  on  Ev.  §  416  ;  Gould  v.  Norfolk  Lead  Co.,  9  Cush.  (Mass.) 
338;  Thayer  r.  Meeker,  86  111.  470. 

^  OConner  i\  Insurance  Co.,  31  Wis.  160;  Roberts  v.  N.  W.  Nat.  Ins. 
Co.,  90  Wis.  210. 

6  Xeal  c.  Patten,  40  Ga.  363. 

'  Columbia  Bridge  Co.  v.  Geisse,  38  N.  J.  L.  39. 

8  Langliorn  i\  Allnut,  4  Taunt.  511;  Re  Devala  Provident,  &c.  Co.,  22 
Ch.  Div.  593. 


180  PKINCIPAL   AND    THIRD   PARTY. 

§  138.     When  admissible.  —  General  rule. 

If  the  admission  of  the  agent  is  offered  in  evidence  to 
establish  the  existence  or  non-existence  of  some  fact  (other 
than  that  of  the  existence  or  extent  of  the  agency),  it  is  neces- 
sary, in  order  that  the  admission  or  declaration  of  the  agent 
may  be  binding  on  his  principal,  that  the  following  elements 
should  concur  :  (1)  the  fact  of  the  agency  must  be  established  ; 
(2)  the  admission  or  declaration  must  be  in  regard  to  some 
matter  within  the  scope  of  the  agent's  authority  ;  (3)  the 
admission  or  declaration  must  (a)  constitute  a  part  of 
the  "  n-s  [/estce "  of  a  transaction  in  which  the  agent  was 
acting  for  his  principal,  and  (6)  serve  to  characterize  that 
transaction. 

The  first  two  elements  do  not  call  for  special  discussion. 
They  involve  considerations  already  familiar  to  the  reader. 
There  must  be  an  agency  and  the  agent  must  be  acting  within 
the  scope  of  his  authority  in  oi'der  that  any  aet  of  his  may  be 
binding  on  his  principal.  This  is  as  true  of  his  statements 
as  of  his  conduct.  If  the  admissions  or  declarations  have 
reference  to  acts  which  the  agent  had  no  authority  to  perform, 
or  to  any  matter  foreign  to  the  agency,  they  stand  on  the  same 
level  as  statements  of  strangers  and  are  clearly  inadmissible.^ 
But  if  the  principal  refers  a  third  person  to  an  agent  for  in- 
formation concerning  a  particular  matter  the  statements  of 
the  agent  respecting  such  matter  are  evidence  against  the 
principal.^ 

§139.     "When  admissible.  —  Res  gestae. 

It  is  said  that  the  declaration  of  an  agent  to  be  competent 
evidence  against  his  principal  must  meet  two  requirements : 
(rt)  it  must  constitute  a  part  of  the  res  gestae  of  a  transaction 
in  which  tiie  agent  was  acting  for  his  princi])al ;  (A)  it  must 

1  1  Greenleaf  on  Ev.  §  113;  Fairlie  v.  Hastings,  10  Ves-  Jr.  123;  Bar- 
nett  V.  South  London  Tram.  Co.,  18  Q.  B.  D.  815;  Garth  v.  Howard,  8 
Bing.  451;  Fogg  v.  Pew,  10  Gray  (Mass.),  409;  Lamm  v.  Port  Deposit, 
&c.  Assn.,  49  Md.  233. 

*  Williams  v.  lanes,  1  Camix  3G4;  Hood  v.  Reeve,  3  C.  &  P.  532. 


ADMISSIONS   BY   AGENT.  181 

be  one  which  naturally  accompanies  the  transaction  and  illus- 
trates or  unfolds  its  character  or  quality. ^ 

(a)  The  first  requirement  is  briefly  stated  in  the  familiar 
rule  that  the  declaration  must  constitute  a  part  of  the  res 
gcstce.  This  merely  means  that  what  an  agent  says  or  does 
in  the  conduct  of  a  transaction  for  his  principal  is  treated 
as  if  it  had  been  said  or  done  by  the  principal,  under  the 
application  of  the  fiction  of  identity.  The  tavm  res  gestmi^ 
simply  a  convenient  symbol  for  conveying  this  idea.  It  really 
adds  nothing,  and,  because  of  its  literal  vagueness  and  its 
somewhat  different  use  in  other  branches  of  the  law,  has  led 
to  some  darkening  of  counsel.  If  the  phrase  "  of  the  res 
gestce"  were  omitted  from  the  first  sentence  in  this  section, 
the  idea  conveyed  would  be  precisely  the  same. 

The  first  inquiry  is,  therefore,  whether  the  declaration 
was  made  as  part  of  a  transaction  in  which  the  agent  was 
acting  for  the  principal.  If  made  before  or  after  the  trans- 
action, it  is  incompetent  as  against  the  principal.^  This 
is  stated  very  clearly  in  the  leading  case  of  White  v. 
Miller :  3 

"The  general  rule  is,  that  what  one  person  says,  out  of 
court,  is  not  admissible  to  charge  or  bind  another.  The 
exception  is  in  cases  of  agency ;  and  in  cases  of  agency,  the 
declarations  of  the  agent  are  not  competent  to  charge  the 
principal  upon  proof  merely  that  the  relation  of  principal  and 
agent  existed  when  the  declarations  were  made.  It  must 
further  appear  that  the  agent,  at  the  time  the  declarations 
were  made,  was  engaged  in  executing  the  authority  conferred 
upon  him,  and  that  the  declarations  related  to,  and  were  con- 
nected with  the  business  then  depending,  so  that  they  con- 
stituted a  part  of  res  gesfceJ^  ^ 

In  the  application  of  this  rule  tlie  courts  have  not  been 
entirely  harmonious  in  deciding  when  the  declaration  is  a 

1  White  V.  Miller,  71  N.  Y.  118,  131;  Butler  v.  ISIanhattun  Ry.  Co., 
143  N.  Y.  417,  422. 

2  Great  W.  Ry.  v.  Willis,  IS  C  B.  x.  s.  748;  Haven  v.  Brown,  7  Me. 
421. 

8  71  N.  Y.  118,  135. 

*  See  also  Fairlie  r.  Hastings,  10  Ves.  Jr.  123. 


182  PKINCIPAL    AND    THIRD    I'AKTY. 

part  of  the  transaction.  Clearly  a  subsequent  narration  by 
the  agent  is  not.^  Clearly  a  contempoi'aneous  statement  by 
way  of  inducement  or  representation  is.^  In  contract  cases 
there  seems  to  be  little  difficulty  in  deciding  whether  the 
declaration  falls  within  the  first  or  the  second  of  these 
classes,  for  the  moment  of  the  formation  or  completion  of  the 
contract  marks  the  tei'mination  of  the  transaction.^  Yet 
even  in  such  cases  admissions  may  be  made,  subsequent  to  the 
formation  of  the  contract  but  relating  to  it,  which  will  be 
proper  evidence  against  the  principal  provided  the  agent  in^ 
making  the  admissions  was  still  within  the  ordinary  course 
of  his  employment  or  duties.  Thus  the  statement  of  a  station 
agent  to  the  police  that  he  believes  another  servant  has 
absconded  with  a  parcel  delivered  for  carriage  at  that  station 
is  admissible.^  So  the  acknowledgment  of  an  agent  in 
charge  of  a  business  that  a  certain  sum  is  due  for  goods 
bought  in  the  course  of  that  business  is  admissible  in  order 
to  charge  the  principal  or  to  take  a  case  out  of  the  Statute  of 
Limitations.^  It  would  seem  logical  to  say  that  whenever  an 
admission  or  statement  is  made  by  an  agent  within  his  osten- 
sible authority  and  operates  to  mislead  a  third  person,  or  to 
cause  him  to  act,  or  refrain  from  acting,_  to  his  prejudice,  the 

1  Great  W.  Ry.  v.  Willis,  18  C.  B.  n.  s.  748;  Stiles  v.  Western  R.,  8 
Met.  (Mass.)  44;  Phelps  v.  James,  86  Iowa,  398;  Empire  Mill  Co.  v. 
Lovell,  77  Iowa,  100;  White  v.  INIiller,  supra  :  Fairlie  v.  Hastings,  supra. 

2  Peto  V.  Hague,  5  Esp.  134 ;  Baring  v.  Clark,  19  Pick.  (Mass.)  22C  ; 
Dick  V.  Cooper,  24  Pa.  St.  217;  Burnside  r.  Grand  Trunk  Ry.,  47  N.  H. 
5.54. 

^  Declarations  in  the  course  of  a  transaction  amounting  to  warranties 
or  to  fraud  may  be  distinguished.  In  such  cases  the  warranty  or  the 
fraud  is  the  main  fact  to  be  established.  See,  for  example.  Nelson  v. 
Cowing,  6  Hill  (N.  Y.),  336;  Jeffrey  v.  Bigelow,  13  Wend.  (N.  Y.)  518  ; 
Snialley  r.  Morris,  157  Pa.  St.  349.  Declarations  which  are  authorized  are 
also  to  be  distinguished,  as  where  two  persons  converse  by  telephone 
through  the  agency  of  a  telephone  operator.  Oskamp  v.  Gadsden,  35 
Neb.  7. 

*  Kirkstall  Brewery  Co.  r.  Furness  Ry.,  L.  R.  9  Q.  B.  408.  See  also 
!Morse  v.  Conn.  Riv.  R.,  6  Gray  (Mass.),  450;  St.  Louis,  &c.  R.  v.  Weaver, 
35  Kans.  412. 

^  Anderson  v.  Sanderson,  Holt  N.  P.  591 ;  Clifford  v.  Burton,  1  Bing. 
199 ;  Burt  v.  Palmer,  5  Esp.  145 ;  Webb  v.  Smith,  6  Colo.  365. 


ADMISSIONS   BY   AGENT.  183 

principal  should  be  bound  by  such  admission  or  statement  in 
accordance  with  the  usual  doctrines  of  estoppel. ^  But  where 
no  doctrine  of  estoppel  can  be  invoked,  then  the  question  is 
narrowed  to  one  of  evidence  merely,  and  the  inquiry  is  whether 
the  declaration  constitutes  a  part  of  an  authorized  transaction 
then  pcndinir,  and  is  therefore  a  part  of  the  res  gestce  of  that 
transaction.^ 

In  cases  of  pure  tort  in  which  no  doctrine  of  estoppel  is 
api)licable,  that  is,  in  cases  of  declarations  by  servants  adverse 
to  their  masters'  interests,  the  question  is  more  difficult  and 
more  confused,  because  it  is  ordinarily  no  part  of  the  duty  of 
servants  to  make  declarations  or  admissions  for  their  masters. 
Yet  the  courts  have  admitted  declarations  of  servants  made 
in  connection  with  such  torts,  where  the  servant's  declaration 
or  admission  is  closely  connected  with  his  tortious  act  or 
omission  and  serves  to  characterize  it.  How  closely  the 
declaration  must  be  connected  in  point  of  time  with  the  act 
or  omission  in  order  to  be  admissible  as  against  the  principal 
is  uncertain.  The  courts  have  shifted  the  line  in  accordance 
with  the  peculiar  circumstances  of  each  case,  and  their  inter- 
pretation of  the  general  rule.  The  test  is  that  the  declaration 
must  be  in  such  close  connection  with  the  act  or  omission 
constituting  the  tort  as  to  be  clearly  spontaneous  and  unde- 
signed, leaving  no  opportunity  for  the  ])laying  of  a  part  or 
the  invention  of  explanations  or  excuses.  If  strictly  con- 
temporaneous, the  declaration  is  admissible.^  If  unquestion- 
ably suliscquent  both  as  to  time  and  causal  relation,  the  dec- 
laration is  inadmissible.^  If  in  point  of  time  subsequent,  but 
in  point  of  causal  relation  to  the  main  act  substantially  con- 
temporaneous, the  declaration  will  be  admitted  by  some  courts 
and  rejected  by  others.     One  class  of  cases  holds  that  if  the 

1  Ante,  §§  102-103. 

2  Loomis  V.  New  York  &c.  R.,  159  Mass.  30. 

8  Elledge  v.  Ry.  Co.,  100  Cal.  282;  Bigloy  r.  Williams,  80  Pa.  St. 
107. 

*  Williamson  v.  Cambridge  R.,  144  ^lass.  148;  Luby  r.  Hudson  Riv. 
R.,  17  N.  Y.  131;  Packet  Co.  r.  Clough,  20  Wall.  (U.  S.)  528;  Worden 
V.  Humeston,  &c.  R.  Co.,  72  Iowa,  201. 


184  PRINCIPAL   AND    TIIHM)    TARTY. 

declaration  is  clearly  tlic  result  of  the  main  act  alone,  and 
not  of  that  plus  possible  reliection  on  the  part  of  the  agent 
or  servant,  it  is  admissible ;  anotlior  class  rejects  tliis  doc- 
trine as  too  refined  for  practical  ai)i)lication,  and  holds  to 
the  rule  requiring  a  proximity  in  time,  which  might  prop- 
erly be  described  as  instantaneously  successive.  This  dif- 
ference of  judicial  opinion  is  well  illustrated  in  VicJcsburgj 
^c.  Railroad  Co.  v.  O'Brien,^  the  Supreme  Court  of  the 
United  States  standing  five  to  four  against  the  admission 
of  the  declaration  of  a  locomotive  engineer  made  from  ten 
to  twenty  minutes  after  an  accident.  The  minority  dissented 
on  the  ground  that  the  modern  cases  have  relaxed  the  strin- 
gency of  the  rule  requiring  "perfect  coincidence"  of  time. 
Perhaps  the  weight  of  American  authority  favors  such  relax- 
ation, guarded  by  the  qualification  that  the  peculiar  facts  of 
each  case  must  determine  whether  the  declaration  is  unde- 
signed and  spontaneous,^ 

{h)  The  second  requirement  is  that  the  declaration  should 
be  one  which  illustrates  or  unfolds  the  character  or  quality 
of  the  main  act.  "  While  proximity  in  point  of  time  with 
the  act  causing  the  injury  is  in  every  case  of  this  kind 
essential  to  make  what  was  said  by  a  third  person  [agent], 
competent  evidence  against  another  [principal]  as  part  of 
the  res  gestce,  that  alone  is  insufficient,  unless  what  was  said 
may  he  considered  part  of  the  principal  fact,  and  so  a  part 
of  the  act  itself.  But  as  in  this  case  the  .  .  .  [remark]  was 
not  one  naturally  accompanying  the  act,  or  calculated  to 
unfold  its  character  or  quality,  it  was  not  admissible  as  res 
gesitoe.  .  .  .  Res  gestce  in  a  case  like  this  implies  substantial 
coincidence  in  time,  but  if  declarations  of  third  persons  are 
not  in  their  nature  a  part  of  the  fact,  they  are  not  admissible 
in  evidence,  however  closely  related  in  point  of  time."^ 

1  119  U.  S.  99. 

2  Alabama,  &c.  R.  v.  Hawk,  72  Ala.  112 -,  Ohio.  &c.  Ry.  v.  Stein,  133 
Ind.  243;  Ilarriinan  v.  Stowe,  57  Mo.  93;  Hermes  i'.  Chicago,  &c.  Ry., 
80  Wis.  500. 

8  Butler  V.  Manhattan  Ry.  Co.,  143  N.  Y.  417,  423;  Barker  v.  St. 
Louis,  &c.  R.,  126  Mo.  143. 


ADMISSIONS    BY    AGENT.  185 

§  140.     Limitation  of  the  rule.  —  Adverse  interest. 

A  qiialilicatioii  of  the  above  rule  exists  in  cases  where  the 
agent  is  known  to  be  acting  for  himself,  or  to  have  an  adverse 
interest.  Where,  for  example,  the  president  of  a  company 
pledges  the  stock  of  the  company  for  a  personal  loan,  his 
representations  as  to  its  genuineness  do  not  bind  the  com- 
pany. The  pledgee  should  know  in  such  a  case  that  the 
agent's  personal  interest  may  lead  him  to  betray  his  princi- 
pal. "  It  is  an  old  doctrine,  from  which  there  has  never  been 
any  departure,  that  an  agent  cannot  bind  his  principal,  even 
in  matters  touching  his  agency,  where  he  is  known  to  be 
acting  for  himself,  or  to  have  an  adverse  interest."^ 

1  Manhattan  Life  Ins.  Co.  v.  Forty-second  Street,  &c.  R.,  139  N.  Y. 
146. 


186  PRINCIPAL   AND   TIIIKD   PAKTY. 


CHAPTER    XII. 

NOTICE   TO    AGENT. 

§  141.     General  statement  of  the  rule. 

It  is  a  general  statement  of  the  law  that  notice  to  the  agent 
in  the  course  of  his  employment,  and  of  such  a  nature  that  it 
becomes  his  duty  to  communicate  it  to  his  principal,  is  notice 
to  the  principal.  In  other  words,  the  principal  is  chargeable 
with  notice  of  all  the  material  facts  that  come  to  the  knowl- 
edge of  his  agent  in  a  transaction  in  which  the  agent  is  act- 
ing for  the  principal.^  If  this  were  not  so  a  purchaser  could 
always  free  himself  from  the  possible  equities  arising  from 
the  acquisition  of  knowledge  of  adverse  rights  in  or  to  the 
property  purchased,  by  purchasing  through  an  agent.^  It  is 
against  the  policy  of  the  law  to  place  one  who  deals  through 
an  agent  in  a  better  position  than  one  who  deals  in  person.^ 

But  the  rule  has  a  wider  sweep  than  this.  One  who  deals 
through  an  agent  may  be  placed  in  a  worse  position  than  one 
who  deals  in  person.  By  the  application  of  the  fiction  of 
identity  all  the  knowledge  present  in  the  mind  of  the  agent, 
whenever  or  however  acquired,  may  be  treated  as  the  knowl- 
edge of  the  principal.  In  other  words,  if  P  employs  A,  and 
it  hapi)ens  that  A  possesses  information  affecting  the  trans- 
action, P  will  be  charged  with  this  knowledge;  whereas,  if  P 
employs  B,  who  happens  not  to  possess  such  information, 
P  will  not  be  charged  with  notice. 

The  subject  of  notice  has,  therefore,  two  branches :  (1) 
where  the  notice  is  acquired  by  the  agent  in  the  course  of 
the  transaction  in  respect  of  which  it  is  invoked  ;  (2)  where 
the  notice  is  acquired  by  the  agent  outside  of  the  transaction 

1  The  Distilled  Spirits,  11  Wall.  (U.  S.)  356;  Hyatt  v.  Clark,  118 
N.  Y.  563. 

2  Sheldon  v.  Cox,  Amb.  624. 

8  Kennedy  v.  Green,  3  Myl.  &  K.  699. 


NOTlCIi   TO    AGENT.  187 

in  respect  of  wliich  it  is  invoked,  either  (a)  while  he  is  agent, 
or  (b)  before  the  agency  begins. 

§  142.     Notice  acquired  during  the  transaction. 

All  the  authorities  agree  that  notice  acquired  by  the  agent 
in  the  course  of  the  transaction  which  it  affects,  is  notice  to 
the  principal.  "  The  rule  that  notice  to  the  agent  is  con- 
structive notice  to  the  principal,  is  based  on  the  presumption 
tliat  the  agent  has  connnunicated  to  the  principal  the  facts 
connected  with  the  subject-matter  of  his  agency  which  came 
to  his  notice.  .  .  .  Where  others  than  the  principal  and  agent 
are  concei'ned,  the  presumption  that  the  agent  has  discharged 
his  duty  to  his  principal  in  communicating  facts  of  which  he 
has  notice,  is  as  conclusive  as  the  presumption  that  the  princi- 
pal remembers  the  facts  brought  home  to  him  personally."  ^ 

It  therefore  follows  that  as  to  notice  acquired  by  the  agent 
in  the  course  of  the  transaction  in  respect  of  which  the  notice 
is  invoked,  the  principal  is  bound  as  fully  as  if  he  acquired 
the  notice  in  person,  and  whether  the  agent  remembered  the 
fact  at  the  final  conclusion  of  the  transaction  or  not.'-^ 

But  if  an  agent  is  employed  for  a  particular  purpose,  and 
does  not  accomplish  it,  and  subsequently  another  ^agent  is 
employed  for  the  same  purpose,  and  does  accomplish  it,  notice 
to  the  first  agent,  not  communicated  to  the  principal  or  to 
the  second  agent,  does  not  affect  the  transaction.^  So  also 
if  an  agent  acquires  notice  in  a  transaction  wholly  foreign  to 
the  one  in  question,  his  principal  is  not  estopped  within  the 
rule  now  under  consideration.'* 

§  143      Notice    acquired    outside    of    transaction    but    in   general 
scope  of  agency. 
A  distinction  must  be  drawn  between  an  agent,  like  an 
attorney,  who  acts  for  his  principal  in  totally  different  trans- 

1  Bierce  v.  Red  Bluff  Hotel  Co.,  31  Cal.  160,  166. 

2  Hiern  v.  Mill,  13  Yes.  114;  Blackburn  v.  Haslam.  21  Q.  B.  D.  14-1; 
Bavvden  v.  London,  &c.  Co.,  1802,  2  Q.  B.  534;  Suit  r.  Woodhall,  113 
Mass.  391 :  Hill  v.  North,  34  Vt.  604. 

8  Blackburn  i\  Vigors,  12  App.  Cas.  531  :  Irvine  r.  Grady,  85  Tex.  120. 
*  Tate  V.  Ilyslop,  15  Q.  B.  D.  368;  Union  N.  B.  v.  German  Ins.  Co., 
71  Fed.  Rep.  473. 


188  PRINCIPAL    AND   THIRD    PARTY. 

actions,  perhaps  separated  by  a  considerable  period  of  time, 
and  an  agent,  like  a  bank  cashier  or  a  general  manager,  who 
is  engaged  in  a  continuous  series  of  transactions,  all  incidents 
of  the  conduct  of  a  general  business. 

As  to  the  first,  it  is  believed  that  the  rule  as  to  notice  is 
the  same  as  in  the  case  where  the  notice  is  acquired  before 
the  agency  begins. 

As  to  the  second,  the  rule  as  established  by  many  of  the 
courts  is  the  same  as  in  the  case  of  notice  acquired  in  the 
particular  transaction.  "  The  general  rule  is  well  established 
that  notice  to  an  agent  of  a  bank,  or  other  corporation,  en- 
trusted with  the  management  of  its  business,  or  of  a  par- 
ticular branch  of  its  business,  is  notice  to  the  corporation,  in 
transactions  conducted  by  such  agent,  acting  for  the  corpora- 
tion, within  the  scope  of  his  authority,  whether  the  knowledge 
of  such  agent  was  acquired  in  the  course  of  the  particular 
dealing,  or  on  some  prior  occasion."  ^  "Where  the  agency 
is  continuous,  and  concerned  with  a  business  made  up  of  a 
long  series  of  transactions  of  a  like  nature,  of  the  same 
general  character,  it  will  be  held  that  knowledge  acquired  as 
agent  in  that  business  in  any  one  or  more  of  the  transactions, 
making  up  from  time  to  time  the  whole  business  of  the  prin- 
cipal, is  notice  to  the  agent  and  to  the  principal,  which 
will  affect  the  latter  in  any  other  of  those  transactions  in 
which  that  agent  is  engaged,  in  which  that  knowledge  is 
material."  ^ 

§  144.     Notice  acquired  before  agency  begins. 

There  are  two  views  as  to  the  effect  of  notice  acquired  by 
the  agent  before  the  agency  begins.  It  is  believed  that  notice 
acquired  by  the  agent  in  a  prior  disconnected  agency  for  the 
same  principal  is  to  be  treated  as  notice  acquired  before  the 
agency  begins. 

(1)  The  first  view  is  that  the  principal  is  never  to  be 
charged  with  notice  of  any  fact  learned  by  the  agent  before 
the   agency   begins.     This  .rests   upon   the   notion   that   the 

1  Cragie  v.  Hadlev,  99  N.  Y.  131,  134. 

2  Ilolden  V.  New  York  and  Erie  Bank,  72  N.  Y.  286,  292. 


NOTICE  TO   AGENT.  189 

identity  of  the  principal  and  agent  exists  only  during,  tbe 
time  the  agency  exists.  "  The  true  reason  of  the  limitation 
is  a  technical  one,  tliat  it  is  only  during  the  agency  that  the 
agent  represents,  and  stands  in  the  shoes  of  his  principal. 
Notice  to  him  then  is  notice  to  his  principal.  Notice  to  him 
twenty-four  hours  hefore  the  relation  commenced  is  no  more 
notice  than  twenty-four  hours  after  it  had  ceased  would  be."  ^ 

(2)  The  second  view  is  that  notice  acquired  by  an  agent  be- 
fore the  agency  begins  is  notice  to  the  pvluclpsd, provided  that 
the  fact  is  present  in  the  mind  of  the  agent  at  the  time  of  the 
transaction  as  to  which  the  notice  is  invoked,  and  provided 
that  the  agent  is  at  liberty  to  disclose  it.^  The  qualifications 
to  the  rule  are  important.  It  must  be  shown  that  the  agent 
remembered  the  fact  in  question  —  had  it  present  in  his  mind 
—  at  the  time  he  was  acting  for  the  principal ;  in  the  absence 
of  such  proof  the  knowledge  will  not  be  imputed  to  the  prin- 
cipal.3  Some  cases  hold  that  "  if  the  agent  acquires  his  infor- 
mation so  recently  as  to  make  it  incredible  that  he  should 
have  forgotten  it,  his  principal  will  be  bound."  ^  It  must  also 
appear  that  he  was  at  liberty  to  disclose  it,  tliat  is,  that  he 
"would  not  be  violating  his  duty  to  another  principal  in  so 
doing.^  And  it  appears  that  the  burden  is  upon  the  one  alleg- 
ing the  notice  to  establish  these  facts.^ 

§  145.     General  qualifications. 

There  are  two  general  qualifications  which  must  be  con- 
sidered in  connection  with  the  general  rule  of  notice. 
.  (1)  The  fact  constituting  the  notice  must  have  a  material 

1  Houseman  v.  Girard,  &c.  Ass'n,  81  Pa.  St.  256,  262;  McCorniick  v. 
Joseph,  83  Ala.  401 ;  Satterfield  v.  Malone,  35  Fed.  Rep.  (Penn.  Circuit) 
445. 

2  The  Distilled  Spirits,  11  Wall.  (U.  S.)  356;  Fairfield  Savings  Bank 
V.  Chase,  72  Me.  226;  Lebanon  Savings  Bank  v.  Hollenbeck,  29  Minn. 
322;  Burton  v.  Periy,  146  111.  71 ;  Shafer  v.  Phoenix  Ins.  Co.,  53  Wis.  361; 
Dresser  v.  Norwood,  17  C.  B.  n.  s.  466. 

»  Constant  v.  University  of  Rochester,  111  N.  Y.  604. 
*  Brothers  v.  Bank,  84  Wis.  381,  395. 
^  Constant  v.  University,  supra. 
6  Ibid. 


190  PRINCIPAL   AND   THIRL)   PAUTY. 

bearing  upon  the  subject-matter  within  the  scope  of  the 
agency.  It  is  not  enough  that  it  has  a  material  bearing  upon 
the  subject-matter  outside  the  scope  of  the  agency.  An  agent 
may  be  given  only  a  very  limited  and  special  power  over  tlic 
subject-matter,  and  the  fact  in  question  may  have  no  bearing 
upon  the  exercise  of  that  power.  In  that  case  the  knowledge 
of  the  agent  would  not  be  imputed  to  the  i)rincipal.  '"The 
knowledge  or  notice  must  come  to  an  agent  who  has  authority 
to  deal  in  rcfei'cnce  to  those  matters  which  the  knowledge  or 
notice  affects.  The  facts  of  which  the  agent  had  notice  must 
be  within  the  scope  of  the  agency,  so  that  it  becomes  his  duty 
to  act  upon  them  or  communicate  them  to  his  principal.  As 
it  is  the  rule  that  whether  the  principal  is  bound  by  contracts 
entered  into  by  the  agent  depends  upon  the  nature  and  extent 
of  the  agency,  so  docs  the  effect  upon  the  princijial  of  notice 
to  the  agent  depend  upon  the  same  conditions."  ^ 

(2)  It  can  never  be  reasonably  inferred  that  an  agent  will 
communicate  his  knowledge  to  his  principal  where  it  is  clearly 
against  his  own  interest  to  do  so.^  Accordingly  a  princij)al  is 
not  bound  by  notice  acquired  by  his  agent  in  a  transaction 
where  the  agent  is  acting  adversely  to  his  principal,^  or  has 
colluded  with  third  persons  to  defraud  his  principal.^  This  is 
analogous  to  the  case  where  an  agent  commits  a  wilfid  tort 
for  his  own  ])urposcs,  and  not  as  a  means  of  performing  the 
business  entrusted  to  liim.^ 

§  146.     Application  of  rule  to  corporations. 

The  general  rule  that  notice  to  an  agent  acting  within  the 
scope  of  his  authority  and  in  regard  to  the  subject-matter  of 
the  agency,  is  notice  to  the  ])rincipal,  a])plics  to  corporations 
as  well  as  to  individual  jiriucipals.*^     Indeed,  it  is  probably  in 

1  Trentor  r.  Potlien,  40  Minn.  2dS\  Pittman  r.  Sofley,  01  111.  155. 

2  Cave  r.  Cave,  15  Cli.  Div.  G:!!);  Barnes  v.  Trenton  Gas  Light  Co.,  27 
N.  J.  Eq.  33;  Innerarity  v.  Merchants'  Nat.  Bk.,  139  Mass.  332. 

8  Frenkel  v.  Hudson,  82  Ala.  158. 

*  Western  Mortg.  &  Invest.  Co.  v.  Ganzer,  63  Fed.  Rep.  047 ;  Hudson 
r.  Randolph,  GO  Fed.  Rep.  210;  Nat.  L.  Ins.  Co.  v.  Minch,  53  N.  Y.  144. 

^  Allen  r.  South  Boston  R.,  150  Mass.  200.  Cf.  Bank  r.  American 
Dock  &  Trust  Co.,  143  N.  Y.  559. 

®  Story  on  Agency,  §  140  a;  Duncan  v.  Jaudou,  15  Wall.  (U.  S.)  105; 


NOTICE    TO    AGENT.  191 

reference  to  corporations  that  the  rule  is  most  frequently  in- 
voked, for  as  is  said  in  one  case  :  "  A  corporation  cannot  see 
or  know  anything  except  by  the  eyes  or  intelligence  of  its  offi- 
cers." ^  (Generally  speaking,  however,  its  application  to  both 
individuals  and  corporations  is  governed  by  the  same  limita- 
tions, and  it  is  therefore  only  necessary  to  note,  in  this  sec- 
tion, that  subject  to  a  few  exceptions,  notice  to  either  a 
stockholder  2  or  a  single  director  ^  of  a  coi'poration  is  not  re- 
garded as  notice  to  the  corporation.  But  if  the  director  acts 
as  a  member  of  the  board  in  passing  upon  the  matter  concern- 
ing which  he  has  notice,  the  corporation  is  charged  with  his 
knowledge.  "  If  the  note  is  discounted  by  a  bank,  the  mere 
fact  that  one  of  the  directors  knew  the  fraud  or  illegality  will 
not  prevent  the  bank  from  recovering ;  but  if  the  director  who 
has  such  knowledge  acts  for  the  bank,  in  discounting  the  note, 
his  act  is  the  act  of  the  bank,  and  the  bank  is  aft'ectcd  with 
his  knowledge."^  But  if  "  the  officer  who  has  such  knowledge 
has  also  such  connection  with  or  interest  in  the  subject-matter 
of  the  transaction  as  to  raise  the  presumption  that  he  would 
not  communicate  the  fact  in  controversy,  there  is  no  imputa- 
tion of  notice  to  the  corporation."  ^ 

§  147.     Notice  of  sub-agent. 

Does  notice  to  a  sub-agent  stand  upon  the  same  footing  as 
notice  to  an  agent  ?  The  question  was  fully  discussed  in  the 
leading  case  of  Hoover  v.  }Vise^  and  the  decision  reached  by 
a  divided  court  was  that  if  the  agent  has  power  to  apj)oint  a 

Union  Gold  Min.  Co.  v.  Rocky  INIt.  N.  B.,  2  Colo.  248;  Smith  i-.  Water 
Comin.,  38  Conn.  208. 

1  Factors,  &c.  Co.  v.  Maine  Dry  Dock,  &c.  Co.,  31  La.  An.  149. 

2  Housatonic  Bk.  v.  Martin,  1  Mete  (Mass.)  294;  Union  Canal  Co.  v. 
Loyd,  4  W.  &  S.  (Penn.)  393. 

3  Powles  V.  Page,  3  C.  B.  16;  Westfield  Bank  v.  Cornen,  37  N.  Y.  320; 
Fairfield  Sav.  Bk.  v.  Cliase,  72  ^le.  22G ;  Farrel  Foundry  Co.  v.  Dart,  26 
Conn.  370. 

4  Bank  v.  Cushman,  121  Mass.  490.  See  also  U.  S.  Bank  v.  Davis,  2 
Hill  (N.  Y.),  451 ;  Union  Bank  v.  Campbell,  4  Humph.  (Tenn.)  394. 

^  Hatch  V.  Ferguson,  66  Fed.  Rep.  668 ;  Innerarity  v.  Bank,  139  Mass. 
332. 

«  91  U.  S.  308. 


192  PRINCIPAL    AND    THIRD    PARTY, 

sub-agent  notice  given  to  the  sub-agent  is  notice  to  the  j)rinci- 
pal,but  if  the  agent  has  not  power  to  appoint  a  sub-agent  then 
notice  to  the  sub-agent  is  not  notice  to  the  principah  The 
dissent  in  this  case  was,  perhaps,  rather  on  the  ground  that 
the  agent  had  authority  to  appoint  the  sub-agent  than  that  the 
rule  of  law  enunciated  by  the  majority  was  incorrect.  The 
case  is  a  typical  one.  A  principal  employs  an  agent  to  make 
a  collection  or  to  transact  some  other  business  which  may  re- 
quire the  assistance  of  an  attorney  at  law.  The  agent  em- 
ploys an  attorney,  and  the  notice  with  which  the  principal  is 
sought  to  be  charged  is  given  to  or  acquired  by  the  attorney. 
Hoover  v.  Wise  holds  that  this  is  not  notice  to  the  principal 
since  the  attorney  is  the  agent  of  the  agent  and  not  of  the 
principal.  As  Mr.  Justice  Miller  points  out  in  a  dissenting 
opinion,  "  the  effect  of  the  decision  is,  that  a  non-resident 
creditor,  by  sending  his  claim  to  a  lawyer  through  some  indi- 
rect agency,  may  secure  all  the  advantages  of  priority  and 
preference  which  the  attorney  can  obtain  of  the  debtor,  well 
knowing  his  insolvency,  without  any  resi)onsibility  under  the 
Bankrupt  Law."  The  view  taken  in  this  cRvSC  by  the  majority 
has  not  generally  prevailed.  It  may  be  said  to  be  the  general 
rule  that,  where  the  business  confided  to  the  agent  reasonably 
contemplates  that  the  assistance  of  an  attorney  at  law  may  be 
required,  the  agent  has  authority  to  appoint  an  attorney,  and 
notice  to  the  attorney  will  be  notice  to  the  principal.^  So  if, 
by  custom,  as  in  the  case  of  insurance  agencies,  it  is  usual  to 
appoint  sub-agents,  notice  to  such  a  sub-agent  will  be  notice 
to  the  principal.^ 

1  Bates  V.  American  Mortgage  Co.,  37  S.  C.  88;  Davis  v.  Waterman, 
10  Vt.  520;  Ryan  v.  Tudor,  31  Kans.  360. 

2  Arff  V.  Star  Fire  Ins.  Co.,  125  N.  Y.  57;  Carpenter  v.  German  Am. 
Ins.  Co.,  135  N.  Y.  298. 


TORTS  AND  FKAUDS  OF  AGENT.  193 


CHAPTER   XIII. 

TORTS,   FRAUDS,   AND   MISREPRESENTATIONS   OF   AGENT. 
1.    ComHtuenf s  Llahilittj  for  Torts  of  Representative. 

§  148.     Distiuction  between  servant's  torts  and  agent's  torts. 

A  representative  may  render  his  constituent  liable  in  tort 
for  the  breach  of  an  antecedent  obligation  fixed  by  the  law.^ 
Such  breach  gives  rise  to  an  action  ex  delicto  for  damages. 

Torts  are  the  chief  subject-matter  of  the  law  of  master  and 
servant.  A  servant  is  employed  to  perform  mechanical  or 
operative  acts  for  his  master.  While  so  engaged  he  may 
negligently  or  wilfully  injure  third  persons.  In  such  case  it 
is  held  that  the  master  is  liable  for  every  wrong  committed 
by  the  servant  in  the  course  of  the  employment  and  for  the 
master's  benefit.^  And  it  is  immaterial  whether  the  master 
authorized  or  directed  the  act ;  the  first  inquiry  is  whether  it 
was  within  the  course  of  the  employment,  and  a  secondary 
inquiry  may  be  whether  it  was  for  the  master's  benefit. 
"  This  rule  is  obviously  founded  on  the  great  principle  of 
social  duty,  that  every  man  in  the  management  of  his  own 
affairs,  whether  by  himself  or  by  his  agents  or  servants,  shall 
so  conduct  them  as  not  to  injure  another;  and  if  he  does  not, 
and  another  thereby  sustains  damage,  he  shall  answer  for 
it,"  '^  that  is,  he  ahall  answer  for  it  under  those  circumstances 
where  the  injury,  if  committed  in  person,  would  constitute  a 
breach  of  legal  duty. 

1  For  a  discussion  of  the  meaning  and  definition  of  "  tort,"  see  Bigelow 
on  Torts  (7th  ed.),  PP-  1-30. 

2  Pollock  on  Torts  (.5th  ed.),  P-  "*-  et  seq. ;  Bigelow  on  Torts  (7th  ed.), 
§§  79-S2. 

»  Fai-well  V.  Boston,  &c.  R.,  4  Mete.  (Mass.)  19. 

13 


194  PRINCIPAL    AND    THIRD    PARTV. 

Contract  is  the  chief  subject-matter  of  tlie  law  of  principal 
and  agent  because  an  agent  is  employed  mainly  to  influence 
third  persons  to  enter  into  new  legal  relations  with  the  prin- 
cipal. Ihit  an  agent  may  have  authority,  real  or  ostensible, 
to  make  representations  to  third  j)ersons  which  when  acted 
upon  involve  the  [iriucipal  in  a  tort  liability.  Accordingly  we 
have  to  discuss  here  such  torts  as  may  be  committed  by  an 
agent  as  agent,  namely,  torts  arising  from  representations 
made  by  the  agent  to  a  third  person  in  order  to  induce  him  to 
act.  These  torts  differ  from  those  committed  by  a  servant 
in  this,  that  a  servant  injures  a  person  by  acting  upon  him  or 
his  property,  while  an  agent  injures  a  person  by  induciug  the 
injured  person  to  act  to  his  own  prejudice  ;  and  this  the 
agent  does  by  making  representations  calculated  to  influence 
the  conduct  of  the  injured  person. 

§  149.     Basis  of  masters  and  of  principal's  liability  for  tort. 

A  master's  liai)ility  for  the  torts  of  his  sei-vant  rests  upon 
no  well-defined  legal  princijdcs.  It  is  clear  that  what  he 
commands  he  should  be  answeral)le  for.  It  is  now  settled 
that  he  may  ratify  a  tort  and  become  answerable  therefor, 
although  a  learned  judge  has  recently  said,  —  "If  we  were 
contriving  a  new  code  to-day,  we  might  hesitate  to  say  that  a 
man  could  make  himself  a  party  to  a  bare  tort,  in  any  case, 
merely  by  assenting  to  it  after  it  had  been  committed."^ 
But  as  to  why  he  is  liable  for  a  tort  which  he  neither  com- 
manded nor  ratified,  it  is  difficult  to  explain.  The  whole 
matter  must  be  referred  to  grounds  of  social  utility.  A 
master  is  answerable  because  the  servant  is  about  the  mas- 
ter's business,  and  it  is,  on  the  whole,  better  that  the  master 
should  suffer  for  defaults  in  the  conduct  of  the  business,  than 
that  innocent  third  persons  should  bear  the  losses  that  such 
defaults  cast  upon  them.^  Whatever  the  reason,  the  rule  is 
established  that  the  master  is  lialde  for  all  torts  committed 
by  his  servant  in  the  course  of  the  employment  and  for  the 

^  Mr.  Justice  Holmes  in  Dempsey  v.  Chambers,  154  Mass.  330. 
a  See  rollock  on  Torts  (5th  ed.)  pp.  72-74. 


TOUTS  AND  FRAUDS  OF  AGENT.  195 

master's  benefit,  and  in  some  cases  even  when  tlie  tort  was 
committed  for  the  agent's  own    purposes.^ 

Many  cases  dealing  with  the  liability  of  a  principal  for  an 
agent's  torts,  and  even  for  misrepresentations  not  amounting 
to  tort,  have  sought  to  apply  the  same  rule  as  in  the  case  of 
master  and  servant.^  But  when  it  is  remembered  that  an 
agent  commits  a  tort  only  by  making  a  representation,  it  will 
be  perceived  that  the  liability  of  the  principal  may  be  made  to 
rest  upon  grounds  more  solid,  or  at  least  more  certain,  than 
those  sustaining  the  liability  of  a  master  for  a  servant's  torts. 
Wo  need  only  inquire  (1)  did  the  principal  hold  the  agent 
out  as  having  authority  to  make  the  representation,  and  (2) 
where  the  third  person  has  been  induced  to  act  to  his  own 
prejudice,  did  the  third  person  act  relying  reasonably  upon 
the  ostensible  authority  of  the  agent  and  the  representations 
which  he  made  ?  In  other  words  we  may  solve  the  problem 
of  the  liability  of  the  principal  for  his  agent's  representations 
upon  the  same  reasoning  as  that  employed  in  solving  the 
problem  of  the  liability  of  the  principal  for  the  contracts  of 
his  agent.''  A  principal  is  responsible  for  every  such  repre- 
sentation of  his  agent  as  is  made  within  the  scope  of  the 
authority,  that  is,  as  he  leads  third  persons  reasonably  to 
believe  that  the  agent  possesses  the  authority  to  make.* 
The  liability  of  a  principal  for  his  agent's  torts  is  therefore 
referred  to  the  doctrine  of  estoppel.  It  is  the  "  scope  of  the 
authority  "  and  not  the  "  course  of  the  employment "  that  is 
the  test.  An  agent  may  have  real  or  ostensible  authority  to 
make  representations.  A  servant  may  have  real,  but  cannot 
have  ostensible,  authority  to  commit  torts.     The  doctrine  of 

1  See  this  more  fully  discussed  in  Book  IT.  under  the  head  of  "  Master 
and  Servant ;  "  post,  §  242  et  seq. 

2  Udell  V.  Atherton,  7  II.  &  N.  172 ;  Barwick  v.  English  Joint  Stock 
Co.,  L.  R.  2  Ex.  259;  British  iNIutual  Banking  Co.  v.  Charnwood  Forest 
Ry.  Co.,  18  Q.  B.  D.  714;  Friedlander  v.  Texas,  &c.  Ry.,  130  U.  S.  410; 
Griswold  v.  Haven,  25  N.  Y.  595,  600;  ante,  §  52  a. 

8  Ante,  §§  102-103,  106. 

*  New  York  &  N.  II.  R.  i\  Schuyler,  34  X.  Y.  30  ;  Armour  v.  :Mich. 
Cent.  R.,  65  X.  Y.  Ill  ;  Bank  of  Batavia  v.  New  York,  &c.  R..  106  N.  Y. 
195;  Fifth  Ave.  Bank  v.  Forty-Second  St.,  &c.  Co.,  137  N.  Y.  231. 


196  PRINCIPAL    AND    THIRD    PARTY. 

estoppel  is  sunicieiit  to  dctenninc  the  liability  of  a  principal 
for  an  agent's  torts  ;  it  can  have  no  ap})lication  to  the  liabil- 
ity of  a  master  for  a  servant's  torts. 

There  are  cases  in  which  the  master  may  be  estopped  to 
deny  tliat  tlie  wrong-doer  is  his  servant,  as  where  he  re- 
presents that  he  is  practising  a  profession  and  thereby  induces 
third  persons  to  be  operated  upon  by  one  held  out  as  his 
skilled  assistant.^  But  this  is  estoppel  to  deny  the  existence 
of  the  relation  merely.  The  liability  for  a  tort  committed  by 
such  ostensible  servant  is  fixed  by  the  ordinary  rule  applicable 
to  master  and  servant.  Estoppel  to  deny  the  existence  of 
the  relation  could  not  be  invoked  where  the  third  person  is 
not  thereby  induced  to  change  his  legal  relations  or  position.^ 

§  150.  Nature  of  third  persons  remedies. 

The  person  injured  by  a  misrepresentation  upon  which  he 
relies  to  his  damage  may  proceed  in  tort  for  deceit  where  the 
misrepresentation  was  made  with  knowledge  of  its  falsity  or 
with  a  reckless  disregard  of  its  truth  or  falsity.  If,  however, 
the  misrepresentation  was  made  innocently,  that  is,  with  a 
belief  in  its  truth,  no  action  in  tort  will  lie.^ 

Misrepresentation  may,  however,  give  the  injured  party  a 
right  to  rescind  a  contract^  or  it  may  work  an  estoppel.^  In 
equity  there  is  also  a  right  of  restitution  which  is  very 
similar  to  the  common  law  action  for  damages.^  Misre- 
prcs(Mitation  is  also  a  defence  to  an  action  for  specific  per- 
formance in  equity. 

In  the  sections  which  follow,  we  shall  first  consider  the 
effect  of  misrepresentation  by  an  agent  in  giving  rise  to  an 
action  in  tort  for  deceit,  and  shall  then  consider  other  aspects 

1  Ilamion  v.  Siegel-Cooper  Co.,  167  X.  Y.  24-4. 

2  Smith  ;-.  Bailey,  1891,  2  Q.  B.  40.'3. 

8  Bigelow  on  Tort  (7th  ed.),  §§  1:39-141;  Derry  v.  Peek,  1-1  App.  Cas. 
337. 

*  Ke<lirrave  v.  Hard,  20  Ch.  Div.  1. 

6  lluft'cut's  Anson  on  Cont.  pp.  199-203;  Ewart  on  Estoppel,  pp.  222- 
237. 

0  Ewart  on  Estoppel,  pp.  222,  225. 


TORTS  AND  FKAUDS  OF  AGENT.  197 

of  the  question  whether  tlic  particular  remedy  sought  be  in 
tort,  in  contract,  or  by  way  of  estoppel. 

2.     Liahilif y  for  Frauds  and  Misrepresentations  of  Agent. 
§  151.     Fraud  and  misrepresentation  generally. 

Fraud  is  a  term  in  the  law  of  rather  vague  meaning.  It  is 
often  used  to  include:  (1)  misrepresentations  which  amount 
to  deceit  and  are  remediable  in  an  action  for  damages  ;  (2)  mis- 
representations whicli,  whether  amounting  to  deceit  or  not, 
are  either  made  terms  in  contracts  or  constitute  inducements 
to  entering  into  contracts.^  Strictly  the  term  fraud  might  well 
be  confined  to  misrepresentations  which  constitute  actionable 
deceit,  while  the  term  misrepresentation  might  be  used  to 
designate  those  cases  where  there  could  be  no  action  for  deceit, 
but  the  misrepresentation  is  either  a  term  in  the  contract  or 
an  inducement  to  entering  into  it.  Fraud  then  might  have 
these  results :  first,  it  might  give  rise  to  an  action  for  deceit ; 
second,  it  might  vitiate  a  contract;  third,  it  might  work  an 
estoppel.  Misrepresentation  might  vitiate  a  contract  or  work 
an  estoppel,  but  it  could  not  give  rise  to  an  action  for  deceit. 

Two  main  problems  confront  us  in  discussing  the  liability 
of  a  principal  for  the  frauds  of  his  agent:  (1)  is  a  personally 
innocent  principal  liable  in  deceit  for  the  wilful  frauds  of  his 
agent;  (2)  is  a  principal  liable  in  any  form  for  the  frauds  of 
an  agent  not  committed  for  the  principal's  benefit  ? 

§  152.     Fraud  in  relation  to  agency :   deceit. 

Deceit,  considered  as  a  tort  for  which  an  action  for  damages 
will  lie,  consists  of  a  false  representation  of  a  material  fact, 
made  with  knowledge  of  its  falsity  or  with  a  reckless  disre- 
gard of  whether  it  is  true  or  false,  and  made  with  intent  that 
it  should  be  acted  upon  by  another,  who,  reasonably  relying 
upon  the  representation,  does  act  upon  it  to  his  damage.'-^ 

A  principal  is  liable  in  deceit  for  such  a  false  representation 
made  by  his  agent  when  the  agent  has  actual  authority  to 

1  Huffcut's  Anson  on  Cont.  pp.  174-183. 

-  Bigelow  on  Torts  (7th  ed.),  §  110;  Pollock  on  Torts  (5th  ed.),  pp. 
269,  270. 


198  PRINCIPAL   AND   THIRD    PAKTY. 

make  the  representation,  when  the  principal  ratifies  the  deceit, 
or  wlien  the  pi'incipal  is  estopped  to  deny  that  the  agent  has 
authority  to  make  the  representation.^ 

The  chief  difficulty  in  proceeding  against  a  principal  for  the 
deceit  of  his  agent  arises  in  connection  with  the  rule  that  one 
in  order  to  be  liable  for  deceit  must  have  made  the  represen- 
tation with  knowledge  of  its  falsity  or  with  reckless  ignorance 
of  its  truth  or  falsity.  The  question  arises,  is  a  personally 
innocent  principal  liable  for  the  fraud  of  his  agent  ?  These 
possible  cases  may  be  put :  — 

(1)  The  principal  knows  the  representation  to  be  false  and 
authorizes  the  agent  to  make  it.  In  such  a  case  the  principal 
is  liable,  and  the  knowledge  or  want  of  knowledge  of  the 
agent  is  immaterial,  although  it  would  become  material  in  an 
action  against  the  agent  for  deceit.'"^ 

(2)  The  principal  knows  the  contrary  of  the  representation 
to  be  true,  but  does  not  expressly  authorize  the  agent  to  make 
any  representation  concerning  the  matter,  (a)  If  the  agent 
knows  the  representation  to  be  false,  or  makes  it  recklessly  in 
ignorance  of  its  truth  or  falsity,  the  principal  is  liable  provided 
the  agent  has  such  ostensible  authority  to  make  a  representa- 
tion concerning  the  matter  as  to  lead  third  persons  to  give  it 
credit  and  act  upon  it.^  (i)  Even  if  the  agent  believes  the 
representation  to  be  true,  it  is  thought  that  the  principal 
should  be  liable,  provided  the  agent  has  ostensible  authority 
to  make  such  a  representation,  since  the  princij)al  holds  out 
the  agent  as  authorized  to  make  a  representation  in  his 
])ehalf  and  should  not  be  permitted,  as  against  an  innocent 
party,  to  plead  that  he  did  not  give  his  agent  all  necessary  in- 
formation within  his  own  knowledge.*  The  leading  case  on 
this  is  Corrifoot  v.  Fowke^  in  which  an  agent  represented  that 

1  Hern  r.  Nichols,  1  Salk.  289;  Grammar  v.  Nixon,  1  Stra.  653. 

2  Pollock  on  Torts  (5th  ed.),  pp.  290-291. 

8  Taylor  v.  Green,  8  C.  &  P.  316;  Parke,  B.,  in  Cornfoot  v.  Fowke,  6 
M.  &  W.  358,  373. 

*  Pollock  on  Torts  (5th  ed.),  p.  291;  Ludgater  i\  Love,  41  L.  T.  K. 
694;  Mayer  r.  Dean,  115  N.  Y.  556. 

'  6  M.  &  W.  358. 


TORTS  AND  FRAUDS  OF  AGENT.  199 

there  was  no  objection  to  a  house  he  was  authorized  to  let, 
whereas,  unknown  to  him  but  i<no\vn  to  his  princij)al,  there 
was  a  brothel  next  door.  In  an  action  for  rent  the  hirer 
pleaded  this  fraud  as  a  defence.  It  was  held  that  the  plea 
was  bad,  although  it  would  have  been  good  if  the  principal 
were  shown  to  have  intentionally  concealed  the  circumstance 
from  his  agent. ^  In  Fuller  v.  Wihon^^  an  agent  employed  to 
sell  a  house  represented  it  to  be  free  from  taxes,  whereas, 
known  to  his  principal  but  unknown  to  him,  it  was  sub- 
ject to  taxes.  It  was  held  that  the  principal  was  liable  in 
deceit. 

(3)  The  principal  has  no  knowledge  or  true  belief  concern- 
ing the  matter,  and  does  not  expressly  authorize  any  repre- 
sentation to  be  made  concerning  it.  (a)  If  the  agent  l<nows 
his  representation  to  be  false,  the  principal  is  liable  provided 
the  agent  had  ostensible  authority  to  make  such  a  representa- 
tion.2  {h)  If  the  agent  is  also  consciously  ignorant  of  the 
truth  or  falsity,  the  principal  should  be  liable,  since  reckless 
statements  are  equivalent  to  intentionally  deceitful  ones. 

(4)  The  principal  believes  the  facts  to  be  as  the  agent  rep- 
resented them  to  be.  {a)  If  the  agent  knows  his  represen- 
tation to  be  false,  the  principal  is  liable,  provided  he  had 
actual  or  ostensible  authority  to  make  such  representations.'* 
(5)  If  the  agent  also  believes  his  representations  to  be  true, 

1  "  III  Cornfoot  v.  Fowke,  it  is  difficult  to  suppose  that  as  a  matter  of 
fact  the  agent's  assertion  can  have  been  otherwise  than  reckless;  what 
was  actually  decided  was  that  it  was  misdirection  to  tell  the  jury  without 
qualification  '  that  the  representation  made  by  the  agent  must  have  the 
same  effect  as  if  made  by  the  plaintiff  himself;'  the  defendant's  {)lea 
averring  fraud  without  qualitiation."  Pollock  on  Torts  (5th  ed.),  p.  291, 
note.  See  criticism  of  this  case  in  Fitzsimmons  v.  Joslin,  21  Vt.  121),  140- 
142 ;  National  Exchange  Co.  v.  Drew,  2  Macq.  103  ;  Ludgater  i\  Love,  44 
L.  T.  R.  694. 

2  3  Q.  B.  58.  Reversed  on  other  grounds  on  appeal,  3  Q.  B.  68,  1009. 

3  Udell  V.  Atherton,  7  IT.  &  N.  172  (court  equally  divided)  ;  Barwick 
V.  English  Joint  Stock  Bank,  L.  R.  2  Ex.  259  ;  Mackay  v.  Commercial 
Bank,  L  R.  5  P.  C.  394 ;  Swire  v.  Francis,  3  App.  Cas.  106 ;  Houlds- 
worth  V.  Glasgow  Bank,  5  App.  Cas.  317  ;  Indianapolis,  &c.  Ry.  v.  Tyng 
63  N.  Y.  653;  City  N.  B.  v.  Dun,  51  Fed.  Rep.  160. 

*  Pollock  on  Torts  (5th  ed.),  pp.  293-294. 


200  PRINCIPAL    AM)    TIIIKI)    I'AKTV. 

the  principal  is  not  liable,  since  neither  principal  nor  agent 
has  been  guilty  of  any  hitent  to  deceive,  or  of  a  reckless  dis- 
regard of  the  conseiiuences  of  the  representation. 

It  will  be  observed  that  deceit  may  be  proved  by  showing 
cither  that  the  prinrijial  and  agent  were  both  guilty  of  fraud, 
or  by  showing  that  the  principal  was  guilty  of  fraud,  or  by 
showing  that  the  agent  was  guilty  of  fraud  while  acting  within 
the  scope  of  his  authority.  If  both  principal  and  agent  were 
innocent  of  fraud,  then  no  action  for  deceit  w' ill  lie. 

The  idea  has  been  put  forward  that  a  personally  innocent 
principal  cannot  be  held  liable  in  tort  for  deceit.^  But  that 
idea  has  not  met  with  favor,  and  it  now  seems  reasonably 
clear  that  the  personally  innocent  princi])al  is  liable  in  tort 
for  deceit,  if  his  agent,  while  acting  within  the  scope  of  his 
authority,  makes  a  deceitful  representation  knowing  it  to  be 
false,  or  consciously  ignorant  of  its  truth  or  falsity.''^ 

Under  statutes  authorizing  an  arrest  in  case  of  fraud  in 
contracting  debt,  it  is  held  that  a  personally  innocent  lU'inci- 
pal  cannot  be  arrested  for  the  fraud  of  his  agent.^ 

§  153.     Fraud  or  misrepresentation  for  benefit  of  principal. 

Leavin"-  aside  now  the  (piestion  as  to  the  particular  form 
of  the  remedy,  we  have  to  consider  whether,  in  order  to  give 
any  remedy  at  all  against  the  principal,  the  misrepresentation 
of  the  agent  must  be  made  for  the  principal's  benefit. 

In  the^  case  of  fraud  committed  by  the  agent  within  the 
scope  of  his  authority,  and  for  the  benefit  of  the  principal,  it 
is  now  generally  conceded  that  the  principal  is  liable  however 
innocenli  he  may  have  been  personally.-*     Thus,  if  the  agent  is 

1  Udell  V.  Athorton,  7  II.  &  N.  172;  Western  Bank  v.  Addie,  L.  R.  1 
Sc.  &  1).  Cas.  145;  Kennedy  r.  McKay,  43  N.  J.  L.  288;  State  v.  Fred- 
ericks  47  N.  J.  L.  40!) ;  Keefe  v.  Sholl,  181  Pa.  St.  90. 

2  Barwick  v.  En<;lish  Joint  Stock  Bank,  L.  R.  2  Ex.  2.j9  ;  Jeffrey  v. 
Bigelow,  l;i  Wend.  (X  Y.)  518;  White  r.  Sawyer,  16  (Jray  (Mass.),  586; 
City  Nat  Bank  v.  Dun.  51  Fod.  Rep.  160;  Peebles  r.  Patapsco  Guano 
Co.,  77  N.  C.  233;    Wolfe  r.  Piigii,  101  Ind.  293,  303-306. 

»  Hathaway  r.  Johnson,  55  N.  Y.  93. 

*  Barwick  v.  English  Joint  Stock  Bank,  L.  R.  2  Ex.  250;  Jeffrey  >•  Bige- 
low,  13  Wend.  (N.  Y.)  518;  Peebles  v.  Patapsco  Guano  Co.,  77  N.  C.  233  ; 


TORTS  AND  FRAUDS  OF  AGENT.  201 

authorized  to  sell  lands  and  makes  false  representations  while 
so  selling  them,  the  principal  is  liable  to  the  purchaser  for 
damages  suffered  in  consequence  of  such  false  representa- 
tions.^ "  When  a  principal  authorizes  an  agent  to  do  a  cer- 
tain thing,  he  is  answerable  for  and  bound  by  the  acts  and 
representations  of  the  agent  in  accomplishing  that  end,  even 
though  the  agent  is  guilty  of  fraud  in  bringing  about  the  re- 
sult. Having  given  such  authority,  the  principal  is  responsible 
for  the  fraudulent  as  well  as  the  fair  means  used  by  the  agent, 
if  they  are  in  the  line  of  accomplishing  the  object  of  the 
agency."  ^ 

In  any  case  where  the  principal  has  in  his  hands  the  fruits 
of  a  contract  made  by  his  agent  through  misrepresentation 
or  fraud,  it  is  clear  that  tlie  misrepresentation  was  for  the 
principal's  benefit  and  he  remains  responsible  for  the  con- 
sequences.^ Duress  stands  in  this  respect  upon  the  same 
footing  as  misrepresentation.'*  No  principle  of  law  seems 
better  settled  than  that  a  man  cannot  reap  the  fruits  of  his 
agent's  frauds  without  also  becoming  subject  to  the  burdens 
of  such  fraud.  ^ 

While  it  is  sometimes  stated  that  in  order  to  render  the 
principal  liable  for  his  agent's  misrepresentations,  they  must 
be  made  for  the  principal's  benefit,  it  is  submitted  that  this 
is  too  stringent,  that  the  true  rule  is  that  they  must  be 
within  the  scope  of  the  authority,  and  that  the  fact  that 
they  are  for  the  principal's  benefit  has  merely  an  evidential 
force  in  determining  whether  they  are  within  the  scope  of 
the  autliority.  Representations  of  agents  outside  the  scope 
of  the  authority  are  of  course  not  binding  upon  the  princi- 

Haskell  v.  Starbird,  152  Mass.  117;  Busch  r.  Wilcox,  82  Mich.  315,  s.  c. 
336;  Griswold  r.  Gebbie,  126  Pa.  St.  353;  Wolfe  v.  Pugh,  101  Ind.  293; 
Rhoda  V.  Aniiis,  75  Me.  17  ;   Smalley  v.  Morris,  157  Pa.  St.  349. 

1  Haskell  r.  Starbird,  supra:  Griswold  c.  Gebbie,  supra. 

2  Wolfe  V.  Pugh,  supra. 

3  Bennett  v.  Judson,  21  N.  Y.  238 ;  Garner  v.  Mangam,  93  N.  Y.  642; 
Krumm  v.  Beach,  96  N.  Y.  398;  Fairchild  v.  McMahon,  139  N.  Y.  290; 
Wolfe  V.  Pugh,  101  Ind.  293,  304. 

4  Adams  v.  Irving  Nat.  Bank,  116  N.  Y.  606. 

5  Myerhoff  v.  Daniels,  173  Pa.  St.  555. 


^K 


202  PRINCIPAL    AND    TUIKD    PARTY. 

pal.^  Wliat  is  now  insisted  upon  is  that  they  are  not  nec- 
essarily outside  of  the  scope  of  the  ostensible  authority  merely 
because  they  are  not,  in  fact,  for  the  principal's  benefit. 

The  difference  between  this  rule  and  the  rule  that  the 
fraud  must  be  for  the  principal's  benefit  is  well  illustrated 
in  the  case  of  the  issue  of  fictitious  bills  of  lading"  or  ficti- 
tious stock  certilicates  by  an  agent  authorized  to  issue  l)ills 
of  lading  or  stock  certificates.^  It  is  also  illustrated  by  the 
conflict  of  opinion  in  the  case  where  a  local  agent  of  a 
mercantile  agency  replied  falsely  to  a  subscriber  concerning 
the  financial  standing  of  a  merchant,  not  to  benefit  the 
agency  but  to  benefit  the  merchant,  and  give  him  a  financial 
credit  which  his  circumstances  did  not  warrant;^  Tlie  trial 
court  thought  that  the  fact  that  the  princijjal  was  i)ersonally 
innocent,  and  that  the  fraud  was  not  for  his  benefit,  was 
immaterial.^  But  the  court  on  appeal  thought  otherwise, 
although  its  decision  rests  in  part  upon  the  terms  of  the 
subscriber's  contract.^  Cases  under  this  head  are  irrecon- 
cilable.    It  remains  to  discuss  them  more  in  detail. 

§  154.     Fraud  for  benefit  of  agent. 

Where  the  fraud  is  committed  within  the  apparent  scope 
of  the  authority,  and  under  cover  of  the  principal's  name  and 
business,  but  for  the  benefit  of  the  agent,  there  is  a  sharp 
confiict  of  authority  as  to  the  liability  of  the  principal. 

In  England  it  seems  to  be  established  that  the  j)rincipal 
is  never  liable  under  such  circumstances.  In  the  leading 
English  case  the  statement  was  that,  "  The  master  is  an- 
swerable for  every  such  wrong  of  the  servant  or  agent  as 
is  committed  in  the  course  of  the  service,  and  for  the  mas- 

1  Browning  v.  Hinkle,  48  Minn.  541;  Lamm  v.  Port  Deposit  Home- 
stead As.so.,  49  Md.  233 ;  Bradford  v.  Hanover  Ins.  Co.,  102  Fed.  Rep.  48. 

2  Post,  §§  1.55,  15G.     See  also  ai>le,  §  52  a. 

'  City  Nat.  Banlt  v.  Dun,  51  Fed.  Rep.  IGO;  reversed  in  Dun  r.  City 
Nat.  Bank,  58  Fed.  Rep.  174. 

*  51  Fed.  Rep.  100. 

6  58  Fed.  Rep.  174.  Following  Pollard  v.  Vinton,  105  U.  S.  7  ;  Fried- 
lander  V.  R.  Co.,  130  U.  S.  410;  see  post,  §§  155,  15G. 


TORTS    AND    FRAUDS    OF   AGENT.  203 

ter's  benefit."  ^  In  a  later  case  it  was  expressly  held  that 
the  limiting  clause,  "and  for  the  master's  benefit,"  is  an. 
essential  element  of  the  liability.^ 

In  the  United  States  two  opposite  views  are  taken.  One 
class  of  cases  follows  the  English  holding  ;  ^  another  class 
of  cases  holds  that,  "  where  the  principal  has  clothed  his 
agent  with  power  to  do  an  act  upon  the  existence  of  some 
extrinsic  fact*  necessarily  and  peculiarly  within  the  knowl- 
edge of  the  agent,  and  of  the  existence  of  which  the  act  of 
executing  the  power  is  itself  a  representation,  a  third  per- 
son dealing  with  such  agent  in  entire  good  faith,  pursuant 
to  the  apparent  power,  may  rely  upon  the  representation, 
and  the  principal  is  estopped  from  denying  its  truth  to 
his  prejudice."^  "If  his  [the  agent's]  position  and  the 
confidence  reposed  in  him  were  such  as  to  enable  him  to 
escape  detection  for  the  while,  then  the  consequences  of 
his  fraudulent  acts  should  fall  upon  the  bank,  whose  direc- 
tors, by  their  misplaced  confidence  and  gift  of  powers,  made 
them  possible,  and  not  upon  others  who,  themselves  acting 
innocently  and  in  good  faith,  were  warranted  in  believing 
the  transaction  to  have  been  one  coming  within  the  cashier's 
powers."  ^ 

This  conflict  of  judicial  opinion  is  well  illustrated  in  two 
classes  of  cases  :  (1)  where  the  agent  fraudulently  issues  stock 
certificates  and  sells  them  for  his   own  benefit ;  (2)  where 

^  Barwick  v.  English  Joint  Stock  Bank,  supra.  And  see  Houldsworth 
V.  City  of  Glasgow  Bank,  L.  R.  5  App.  Cas.  317. 

2  British  Mutual  Banking  Co.  v.  Charnwood  Forest  R.  Co.,  L.  R.  18 
Q.  B.  Div.  714. 

3  Friedlander  v.  Texas,  &c.  Ry.,  130  U.  S.  416,  and  cases  in  succeed- 
ing sections. 

*  Ordinarily  an  agent  can  commit  a  fraud  for  his  own  benefit  only  by 
misrepresenting  an  extrinsic  fact,  as  that  a  document  is  genuine  or  valid, 
that  a  depositor  has  funds,  and  the  like.  In  committing  a  fraud  for  his 
principal's  benefit,  he  usually  misrepresents  an  intrinsic  fact,  as  the  quality 
of  an  article  sold. 

6  Bank  of  Batavia  v.  New  York,  &c.  R.,  106  N.  Y.  195,  199. 

6  Phillips  V.  Mercantile  Nat.  Bk.,  140  N.  Y.  556,  563.  And  see  cases 
jn  succeeding  sections. 


204  PRINCIPAL   AND   THIRD   PARTY. 

the  agent  fraudulently  issues  bills  of  lading  and  sells  them 
for  his  own  benefit. 

§  155.     Fraud  for  benefit  of  agent.  —  Issue  of  stock  certificates. 

If  a  stock  transfer  agent  fraudulently  issues  stock  cer- 
tilicates  in  excess  of  the  amount  which  the  company  may 
lawfullv  issue  and,  by  collusion  with  the  transferee  of  the 
stock,  sells  them  to  innocent  purchasers  for  value  for  his 
own  benefit,  is  the  company  liable  in  an  action  for  damages 
to  the  innocent  purchasers  of  the  stock  ? 

The  English  courts  have  answered  this  question  in  the 
negative.  The  purchasers  called  upon  the  transfer  agent  to 
inquire  as  to  the  validity  of  the  stock,  and  were  of  course 
informed  that  the  stock  was  valid.  The  jMaster  of  the 
Rolls  (Lord  Esher)  said:  "The  secretary  was  held  out  by 
the  defendants  as  a  person  to  answer  such  questions  as 
those  put  to  him  in  the  interest  of  the  plaintiffs,  and  if  he 
had  answered  them  falsely  on  behalf  of  the  defendants,  he 
being  then  authorized  by  them  to  give  answers  for  them, 
it  may  well  be  that  they  would  l)e  liable.  But  although 
what  the  secretary  stated  related  to  matters  about  which 
he  was  authorized  to  give  answers,  he  did  not  make  the 
statements  for  the  defendant  but  for  himself.  ...  I  know 
of  no  case  where  the  employer  has  been  held  liable  when 
his  servant  has  made  statements  not  for  his  employer,  but 
in  his  own  interest."  ^  It  has  been  thought  that  the  United 
States  Supreme  Court  has  held  the  same  docti'ine,  but  the 
case  in  question  may  well  be  distinguished  on  the  ground 
that  the  third  i)arty  w^as  l)uying  the  stock  of  the  agent,  and 
had  therefore  no  right  to  rely  on  his  representation  whore 
his  interest  was  clearly  adverse  to  that  of  his  princii)al.''^ 
But  it  is  clear  that  the  tendency  of  that  court  is  to  follow 
the  Euglish  doctrine.^ 

1  British  Mutual  Banking  Co.  v.  Chavnwood  Forest  Ky  ,  L.  R.  18  Q. 
B.  Div.  714,  716-717. 

2  Moores  v.  Citizens'  Nat.  Hk.,  Ill  U.  S.  156.    Cf  Bank  of  New  York, 
&c.  I'.  American  Dock  &  Trust  Co.,  143  N.  Y.  .559. 

8  Friedlander  v.  Texas,  &o.  Ry.,  130  U.  S.  416. 


TOKTS  AND  FKAUDS  OF  AGENT.  205 

A  considerable  number  of  American  courts  have  answered 
the  question  in  the  affirmative.  The  leading  New  York  case^ 
presents  an  exhaustive  examination  of  the  whole  subject, 
after  an  argument  by  an  array  of  eminent  counsel  rarely 
united  in  one  proceeding,  and  in  an  opinion  by  Noah  Davis, 
J.,  of  singular  ability  and  lucidity.  The  result  is  embodied 
in  the  doctrine  that  where  the  principal  authorizes  an  act 
which  necessarily  involves  in  the  doing  of  it  a  representa- 
tion as  to  some  extrinsic  fact,  that  he  assumes  the  risk  that 
the  representation  will  be  true.  "  He  knows  that  the  person 
he  authorizes  to  act  for  him,  on  condition  of  an  extrinsic 
fact,  wliich  in  its  nature  must  be  peculiarly  within  the 
knowledge  of  that  person,  cannot  execute  the  power  with- 
out as  res  gestae  making  the  representation  that  the  fact 
exists.  With  this  knowledge  he  trusts  him  to  do  the  act, 
and  consequently  to  make  the  representation  which,  if  true, 
is  of  course  binding  on  the  principal.  But  the  doctrine 
claimed  is  that  he  reserves  the  right  to  repudiate  the  act 
if  the  representation  be  false.  So  he  does  as  between  him- 
self and  the  agent,  but  not  as  to  an  innocent  third  party 
who  is  deceived  by  it.  The  latter  may  answer,  you  entrusted 
your  agent  with  means  effectually  to  deceive  me  by  doing 
an  act  which  in  all  respects  compared  with  the  authority  you 
gave,  and  which  act  represented  that  an  extrinsic  fact  known 
to  your  agent  or  yourself,  but  unknown  to  me,  existed,  and 
you  have  thus  enabled  your  agent,  by  falsehood,  to  deceive 
me,  and  must  bear  the  consequences.  The  very  power  you 
gave,  since  it  could  not  be  executed  without  a  representa- 
tion, has  led  me  into  this  position,  and  therefore  you  are 
estopped  in  justice  to  deny  his"  authority  in  this  case.  By 
this  I  do  not  mean  to  argue  that  the  principal  authorizes 
the  false  representation.  He  only,  in  fact,  authorizes  the 
act  which  involves  a  representation,  which,  from  his  con- 
fidence in  his  agent,  he  assumes  will  be  true ;  but  it  may 
be  false,  and  the  risk  that  it  may,  he  takes,  because  he  gives 
the  confidence  and  credit  which  enables  its  falsity  to  prove 

1  New  York  &  New  Haven  R.  v.  Schuyler,  31  N.  Y.  30,  especially  pp. 
65-75. 


206  PRINCIPAL   AND   THIRD   PARTY. 

injurious  to  an  innocent  party.'' ^  The  doctrine  tlius  estab- 
lished has  been  followed  in  many  succeeding  cases  in  New 
York  and  elsewhere.-  But  the  doctrine  of  these  cases  is 
subject  to  the  qualification  that  the  purchaser  must  act  in 
good  faith  and  prudently  ;  it  is  not  good  faith  or  prudence 
to  trust  to  the  representation  where  the  agent  is  known 
to  be  acting  for  bimself  in  the  sale  of  the  stock.^  And,  of 
com'se,  the  agent  must  be  acting  within  the  apparent  scope 
of  the  powers  entrusted  to  him  ;  an  unauthoi-ized  seizure  of 
the  powers  as  a  means  of  fraud,  where  no  authority  to  exer- 
cise them  exists,  will  not  render  the  principal  liable* 

§  156.     Fraud   for  benefit  of  agent.  - —  Issue  of  fictitious   bills    of 
lading. 

A  similar  question  arises  where  the  agent,  being  authorized 
to  issue  bills  of  lading,  issues  fictitious  bills  of  lading  in  the 
name  of  a  confederate  and  sells  them  through  the  confederate 
to  innocent  purchasers. 

In  England  it  is  held  that  the  principal  is  not  liable,  the 
argument  being  that  the  agent  is  authorized  to  do  what  is 
nsual  in  his  agency  and  it  is  not  usual  to  issue  fictitious  bills  of 
lading.^  This  play  upon  words,  if  resorted  to  in  other  cases, 
would  excuse  the  constituent  for  every  tort  of  his  representa- 
tive. The  English  holding  has  been  followed  in  the  Federal 
courts  and  in  some  of  the  State  courts  in  this  country.^ 

1  New  York  &  New  Haven  R.  c.  Schuyler,  34  N.  Y.  30,  especially  pp. 
70-71. 

2  Fifth  Ave.  Bk.  v.  Forty-second  Street,  &c.  11.,  137  N.  Y.  231 ;  Tome 
r.  Parkersburg  Branch  R.,  39  Md.  36.  See  also  Allen  v.  South  Boston  R., 
1.50  Mass.  200:  Farriugton  t'.  Same,  150  Mass.  406;  American  Wire  & 
Kail  Co.  V.  Bayless,  91  Ky.  94;  Appeal  of  Kisterbock,  127  Pa.  St.  601. 

8  IMoores  v.  Citizens'  N.  B.,  supra;  Allen  r.  South  Boston  R.,  supra; 
Farrington  c.  Same,  supra  ,  Bank  of  New  York,  &c.  v.  American  Dock 
&  Trust  Co.,  supra.  Cf.  New  York  &  New  Haven  R.  v.  Schuyler,  supra, 
p.  64. 

■»  Manhattan  Life  Ins.  Co.  v.  Forty-second  Street,  &c.  R.,  139  N.  Y. 
146. 

6  Grant  v.  Norway,  10  C.  B.  665;  Cox  i-.  Bruce,  L.  R.  18  Q.  B.  Div. 
147.     Cf.  Montai.Ejnac  i-.  Shitta,  15  App.  Cas.  357. 

«  Pollard  y.  Vinton,  105  U.  S.  7 ;   Friedlander  v.  Texas,  &c.  Ry.  130 


TORTS  AND  FRAUDS  OF  AGENT.  207 

In  the  United  States  many  courts  hold  the  principal  liable. 
In  a  leading  New  York  case,i  the  doctrine  of  the  English 
courts  is  expressly  disapproved  and  the  doctrine  of  estoppel 
in  pais  api)lied.  And  this  has  been  followed  by  subsequent 
cases  in  the  same  and  other  jurisdictions.^  Even  the  courts 
which  liold  the  other  doctrine  recognize  the  essential  justice 
of  this.  "  If  the  question  was  res  integra  we  confess  that  it 
seems  to  us  that  this  argument  would  be  very  cogent."  ^  The 
doctrine  is  subject  to  the  same  qualifications  as  in  its  appli- 
cation to  the  issue  of  stock  certificates.* 
§  157.     Fraud  for  benefit  of  agent.  —  Other  illustrations. 

The  doctrine  above  explained  and  illustrated  may  be  in- 
voked under  other  circumstances  too  various  to  be  referred 
to  in  detail.  Thus  a  bank  cashier  who  employs  his  powers 
to  draw  checks,  for  the  purpose  of  converting  the  funds  of 
the  bank  to  his  own  use,  is  using  a  trust  and  confidence 
reposed  in  him  by  the  bank,  and  the  loss  must  fall  on  it 
ratlier  than  on  innocent  parties.^  So  an  agent  of  a  telegraph 
company  wlio  employs  his  power  to  send  telegrams  as  an 
operator  in  the  sending  of  forged  telegrams  requesting  the 
transmission  of  money,  is  abusing  a  trust  and  confidence 
placed  in  him  by  the  company,  and  the  latter,  rather  than 
the  innocent  receiver  of  the  telegram,  should  bear  the  loss.^ 

U.  S.  416 ;  National  Bank  of  Commerce  v.  Chicago,  &c.  R.,  44  Minn.  224, 
and  cases  there  cited.  The  artificial  reasoning  of  this  class  of  cases  is 
illustrated  by  a  comparison  of  the  case  last  cited  with  jNIcCord  v.  Western 
Union  Tel.  Co,  39  Minn.  181,  where  the  same  court  ^vent  to  an  even 
questionable  length  in  applying  the  doctrine  of  estoppel  against  the 
principal. 

1  Armour  v.  Michigan  Central  R.,  65  N.  Y.  111. 

2  Bank  of  Batavia  r.  Xew  York,  &c.  R.,  106  N.  Y.  195;  Brooke  v.  N. 
Y.,  &c.  R.,  108  Pa.  St.  529;  St.  Louis,  &c.  R.  v.  Larned.  103  111.  293; 
Wichita  Bank  v.  Atchison,  &c.  R.,  20  Kans.  519;  Sioux  City,  &c.  R.  v. 
First  Nat.  Bk.,  10  Neb.  556;  Fletcher  v.  G.  W.  El.  Co.,  12  So.  Dak. 
643. 

3  National  Bank  of  Commerce  v.  Chicago,  &c.  R.,  44  Minn.  224,  235. 

4  Bank  of  New  York,  &c.  v.  American  Dock  &  Trust  Co.,  143  N.  Y.  559. 

5  Phillips  V.  Mercantile  Nat.  Bk.,  140  N.  Y.  556. 

«  McCord  V.  Western  Union  Tel.  Co.,  39  ?»Iinn.  181 ;  Bank  of  Palo  Alto 
V.  Pacific  Postal  Tel.  Cable  Co.,  103  Fed.  Rep.  841. 


208  VRIXCirAL   AND    THIRD    I'AKTY. 

"  Persons  receiving  despatches  in  the  usual  course  of  busi- 
ness, when  there  is  nothing  to  excite  suspicion,  are  entitled 
to  rely  upon  the  presumption  that  the  agents  entrusted  with 
the  performance  of  the  business  of  the  company  have  faith- 
fully and  honestly  discharged  the  duty  owed  by  it  to  its 
patrons,  and  that  they  would  not  knowingly  send  a  false  or 
forged  message ;  and  it  would  ordinarily  be  an  unreasonable 
and  impracticable  rule  to  require  the  receiver  of  a  despatch 
to  investigate  the  question  of  the  integrity  and  fidelity  of  the 
defendant's  agents  in  the  performance  of  their  duties,  before 
acting."  ^ 

The  result  of  the  whole  matter  is  this :  one  class  of  cases 
insists  upon  the  hard  and  fast  rule  that  the  fraud  must  be  for 
the  principal's  benefit  in  order  to  render  him  liable,  while  the 
other  class  of  cases  gives  to  that  fact  only  an  evidential  force 
in  determining  the  decisive  question  whether  the  representa- 
tion was  so  far  within  the  scope  of  the  agent's  ostensible 
authority  as  to  warrant  third  persons  in  relying  upon  it. 
By  applying  to  these  cases  the  doctrines  of  estoppel  already 
set  forth  and  clearly  applicable  to  cases  of  contract,  the  latter 
view  appears  to  be  more  nearly  in  accord  with  the  general 
principles  of  agency.^ 

3.     Liahilify  for  influencing  the   Conduct  of  other  Persons 
toward  Plaintiff'. 

§  158.     Representations  about  plaintiff. 

Ill  addition  to  making  representations  to  plaintiff  which 
induce  him  to  change  his  legal  relations  to  his  damage,  an 
agent  may  make  representations  about  plaintiff  which  influ- 
ence the  conduct  of  third  persons  toward  him  to  his  damage. 
It  may  be  questioned  whether  lial)ility  for  such  representa- 
tions depends  at  all  upon  doctrines  applicable  to  j)rincipal 
and  agent.  These  torts  may  be  said  to  lie  on  the  border 
land  between  the  two  fields.  As  they  originate  in  rci)rcscn- 
tations  they  are  within  the  usual  class  of  duties  devolved  upon 
agents  as  distinguished  from  servants.     But  as  the  injured 

1  McCord  V.  W.  U.  Tel.  Co.,  supra.  «   Ante,  §  52  a. 


TOUTS    AND    FRAUDS    OF   AGENT.  209 

person  is  acted  upon  instead  of  being  induced  to  act  himself, 
they  are  more  nearly  like  the  torts  of  a  servant  than  like 
those  of  an  agent.^  Moreover  it  is  doubtful  whether  any 
doctrine  of  estojjpcl  can  be  applied  to  them  since  the  plaintiff 
in  tiiese  cases  has  not  been  misled  to  his  damage  by  any 
representation  of  defendant's  agent.  These  cases,  therefore, 
must  be  mainly  solved  by  the  doctrines  applicable  to  the 
torts  of  servants.^  They  may,  however,  be  here  briefly 
enumerated. 

§  159.     Inducing  breach  or  termination  of  contract. 

It  is  actionable  to  induce  a  breach  of  contract  by  any 
means,  or  to  induce  a  termination  (without  breach),  or  the 
non-formation,  of  a  contract  by  unlawful  means.^  Whether 
it  is  actionable  to  induce  termination  or  non-formation  of  a 
contract  by  persuasion  alone  is  in  dispute.* 

If  an  agent  acting  within  the  scope  of  his  authority  induces 
X  to  break  a  contract  with  plaintiff,  or  by  use  of  unlawful 
means  induces  X  to  terminate,  or  to  refuse  to  form,  a  con- 
tract with  plaintiff,  the  principal  is  liable  to  plaintiff  for  such 
tortious  act  of  his  agcnt.^  He  is  not  liable  if  the  agent  was 
acting  outside  the  scope  of  his  authority  or  the  course  of  his 
employment.^ 

§  160.     Defamation. 

A  principal  is  liable  in  an  action  for  defamation  where  his 
agent  publishes  a  libel  while  acting  within  the  scope  of  his 
authority,  or  usual  course  of  the  employment.^     A  corpora- 

1  Ante,  §§  148,  149. 

2  Ante,  §  149. 

3  Lumley  v.  Gye,  2  E.  &  B.  216;  Rice  r.  Manley,  66  N.  Y.  82;  Angle  v. 
Chicago,  &c.  Ry.,  1.51  U.  S.  1 ;  Bigelow  on  Torts  (7th  ed.),  pp.  127-133. 

*  Allen  V.  Flood,  1898,  App.  Cas.  1;  Walker  v.  Cronin,  107  Mass. 
5.5-");  Bigelow  on  Torts  (7th  ed.),  pp.  115-123;  post,  §  295,  ei  seq. 

5  Rlumenthal  v.  Shaw,  77  Fed.  Rep.  9.54. 

«  Gniham  v.  St.  Charles  St.  Ry.,  47  La.  An.  1656. 

7  Dunn  I'.  Hall,  1  Carter  (Ind.),  344;  Fogg  v.  Boston  &  Lowell  R., 
118  Mass.  513;  Peterson  v.  W.  U.  Tel.  Co.,  75  Minn.  368;  Long  v. 
Tribune  Printing  Co.,  107  Mich.  207 ;  Allen  v.  News  Pub.  Co.,  81  Wis< 
120  ;  post,  §  252. 

14 


210  PRINCIPAL   AND   THIRD    PARTY. 

tion  may  be  held  liable  for  libel  ;  ^  Itiit  it  must  be  shown  tliat 
tlie  corporate  agent  had  express  or  imi)lied  authority  to  make 
the  communieation  in  behalf  of  the  eorporation.^ 

An  employer  is  ei'iminally  lial>le  for  a  libel  published  by  his 
agent  or  servant  witliin  tlie  general  scoi)e  of  the  authority  or 
the  L'm[)i()ymcnt,3  except  as  otherwise  pi'ovided  by  statute.* 

§  161.     False  arrest  and  malicious  prosecution. 

Cases  of  false  arrest  are  more  fully  treated  under  the  head 
of  master  and  servant.^  Briefly  it  may  be  said  that  a  princi- 
pal or  master  is  liable  for  a  false  arrest  directed  by  his  agent 
or  servant  when  such  arrest  is  made  in  the  course  of  the 
employment  and  is  intended  to  be  in  the  employer's  inter- 
ests ;  *^  l)ut  not  when  such  arrest  is  outside  the  course  of  the 
employment''  or  primarily  in  the  public  interest.^ 

While  there  are  discordant  decisions,^  it  may  be  stated  as 
a  general  rule  that  for  malicious  prosecution  instituted  by  an 
agent  or  servant  the  employer  is  liable  provided  the  institut- 
ing of  such  j)rosecution  was  within  the  course  of  the  emj)loy- 
ment  or  the  scope  of  the  authority  and  was  intended  for  the 
employer's  benefit. ^^ 

It  has  been  held  that  corporations  could  not  be  made  liable 

1  Philadelphia,  &c.  R.  v.  Quigley,  21  IIow.  (U.  S.)  202;  Iloboken 
Printing,  ike.  Co.  v.  Kahn,  59  N.  J.  L.  218. 

2  Wa.shington  Gas  Light  Co.  r.  Lansden,  172  U.  S.  5-34. 

8  R.  V.  Gutch,  Moo.  &  Mai.  433;  R.  v.  Walter,  3  Esp.  21;  R.  v.  Cooper, 
8  Q.  B.  533;  People  r.  Clay,  80  111.  147  ;  pnst,  §  268, 

*  6  &  7  Vict.  c.  9G;  Odgers  on  Libel  &  Slander  (3d  ed.),  pp.  432-434; 
N.  Y.  Penal  Code,  §  246. 

6  Post,  §  252. 

8  Lynch  v.  :\Iet.  &c.  Ry.,  90  N.  Y.  77;  Palineri  v.  Manhattan  Ky,,  133 
N.  Y.  261;   Staples  i:  Schmid,  18  R.  I.  224. 

T  Bank  r.  Ow.ston,  4  A])p.  Cas.  27<);  Poulton  v.  I^ondon,  &c.  Rv.,  L.  R. 
2  Q.  P,.  534. 

8  Mulligan  r.  N.  Y.  &  R.  B.  Ry.,  129  X.  Y.  506;  Abrahams  v.  Dea- 
kin,  1891,  1  Q.  B.  516. 

»  Wallace  v.  Finberg,  46  Tex.  35 ;  Carter  v.  Howe  IMachine  Co.,  51 
Md.  200. 

"  Reed  v.  Home  Savings  Bank,  130  Mass.  443;  IIu8.sey  v.  Norfolk,  &c. 
R.,  98  N.  C.  34. 


TORTS  AND  FRAUDS  OF  AGENT.  211 

in  an  action  for  malicious  prosecution  ;  ^  but  most  jurisdic- 
tions have  departed  from  the  artificial  reasoning  of  these 
cases  and  hold  a  corporation  liable  for  malicious  prosecution 
to  the  same  extent  as  any  principal  ;^  also  for  malicious 
conspiracy.^ 

1  Abrath  v.  Northeastern  Ry.,  11  App.  Cas.  217;  Owsley  y.  Montgom- 
ery, &c.  R.,  37  Ala.  5G0. 

2  Goodspeed  r.  East  lladdani  Bank,  22  Conn.  530;  Vance  v.  Erie  R., 
32  N.  J.  L.  334;  Morton  v.  Met.  Ins.  Co.,  31  Hun,  366;  103  N.  Y.  645; 
Williams  v.  Planters'  Ins.  Co.,  57  Miss.  759. 

8  Buffalo  Lubricating  Oil  Co.  v.  Standard  Oil  Co.,  106  N.  Y.  669 ;  12 
N.  E.  Rep.  825. 


212  PRINCIPAL   AND   TIIIKD   PARTY. 


CriAPTER   XIV. 

LIABILITY   OF   THIRD    PERSON    TO    PRINCIPAL. 

^  162.     Introductory. 

"We  have  thus  fur  spoken  in  this  part  mainly  of  the  liabil- 
ities of  the  principal  for  the  acts  of  his  agent.  It  now  remains 
to  consider  briefly  the  rights  which  the  principal  may  acquire 
from  tlie  acts  of  his  agent,  as  against  third  j)ersons  with  whom 
the  agent  deals.  The  liability  of  a  third  person  to  the  princi- 
pal may  arise :  (1)  from  a  contract  obligation  of  which  the 
principal  is  entitled  to  avail  himself;  (2)  from  a  quasi-con- 
tractual obligation  of  which  the  })rincipal  is  entitled  to  avail 
himself ;  (3)  from  a  tort  obligation  of  which  the  principal  is 
entitled  to  avail  himself ;  (4)  from  a  trust  obligation  of  which 
the  principal  is  entitled  to  avail  himself  in  equity.  Each  of 
these  classes  of  liabilities  will  be  briefly  discussed. 

1.    Contract   Ohligations. 

§  163.     Contracts  by  agent. 

A  contract  made  by  an  agent  in  behalf  of  his  ])rincij)al  may 
be  either:  (1)  made  by  the  agent  in  the  name  of  tiie  ))rincipal 
within  the  scope  of  a  prior  authority  ;  (2)  made  by  the  agent 
in  the  name  of  the  principal  outside  the  scope  of  a  prior  au- 
thority. iMit  subsequently  ratified ;  (3)  made  by  the  agent  in 
the  name  of  a  foreign  ])rincipal  ;  (4)  made  by  the  agent  in  his 
own  name.  The  rights  of  the  principal  vary  in  accordance 
with  those  variations  in  the  manner  of  forming  the  contract. 

§  164.     Contracts  in  the  name  of  the  principal. 

(1)  Authorized  contracts.  It  is  too  clear  to  need  demon- 
stration that  a  contract  made  by  an  agent  within  his  author- 
ity, real  or  apparent,  which  would  bind  the  principal  will  also 


LIABILITY   OF   THIRD    PARTY.  213 

bind  the  third  party.  This  is  in  accordance  with  the  estal>- 
lished  doctrines  of  the  mutuality  of  contractual  obligations. 
In  such  a  case  the  principal  is  both  the  real  and  nominal  party 
in  interest  and  is  the  only  one  who  can  sue  or  be  sued  upon 
the  contract.^ 

(2)  Ratified  coyitracts.  An  unauthorized  contract  made  in 
the  name  of  the  principal  and  subsequently  ratified  stands 
upon  the  same  footing  as  one  previously  authorized.  The 
ratification  exonerates  the  agent  from  liability,  relates  back  to 
the  time  of  the  formation  of  the  contract,  and  creates  all  the 
rights  and  obligations  in  favor  of  and  against  the  principal, 
which  would  have  sprung  from  an  authorized  contract.  Ac- 
cordingly after  a  binding  ratification  ^  the  principal  is  the  only 
one  who  can  sue  or  be  sued  upon  such  a  contract/^  It  has 
recently  been  held  by  the  House  of  Lords  in  England  that  an 
unauthorized  contract  made  in  behalf  of  an  undisclosed  prin- 
cipal cannot  be  ratified  by  him  so  as  to  enable  him  to  sue  or 
be  sued  upon  it.* 

(3)  Contract  for  foreign  principal.  It  is  a  rule  of  the  Eng- 
lish law  that  prima  facie  a  principal  resident  in  one  country  is 
not  a  party  to  a  contract  made  in  another  country,  by  his 
agent  resident  tbere,  and  that  he  can  neither  sue  nor  be  sued 
upon  it ;  but  the  presumption  may  be  overcome  by  showing 
that  the  agent  bad  authority  to  pledge  his  principal's  credit 
and  that  tbe  third  party  accepted  the  credit,  thus  establishing 
a  privity  of  contract  between  the  third  party  and  the  princi- 
pal.^ The  rule  of  the  American  law  is  otherwise  as  will  be 
seen  hereafter.^ 

§  165.     Contracts  in  the  name  of  the  agent. 

An  agent  may  contract  in  his  own  name  either  :  (1)  for  an 
undisclosed  principal ;  (2)  for  a  disclosed  principal  who,  how- 

1  Fail-lie  v.  Fenton,  L.  R.  5  Ex.  169;  Sharp  v.  Jones,  18  Ind.  314; 
Dicey  on  Parties  to  Actions,  Rule  17. 

2  Ante,  §§  31-44. 

8  Ante,  §§  45-49 ;  Ancona  v.  Marks,  7  H.  &  N.  686. 
4  Keighiey  v.  Durant,  1901,  App.  Cas.  240. 
6  Post,  §  187, 
6  Ibid. 


214  PRIN'CirAL    AND   THIRD    PARTY. 

ever,  is  not  named  in  the  formal  contract.  Each  case  pre- 
sents features  involving  the  rights  and  liabilities  of  the 
principal. 

(1)  Undisclosed  principals.  The  rights  and  liabilities  of  an 
undisclosed  principal  have  already  been  considered.  Subject 
to  the  exceptions  there  enumerated  the  third  person  is  liable 
to  the  undisclosed  principal  in  the  same  manner  as  if  the 
latter  had  been  disclosed.^ 

(2)  Unnamed  principal.  An  agent  may  disclose  his  prin- 
cipal and  intend  to  make  a  contract  in  his  behalf,  l)ut  fail  of 
this  purpose  by  an  omission  to  name  the  principal  in  the 
formal  instrument.  In  such  a  case  if  the  instrument  be  a 
simple  contract  the  omission  may  be  supplied  and  the  princi- 
pal may  both  sue  and  be  sued  upon  the  contract ;  ^  but  if  the 
instrument  1)C  under  seal  or  negotiable,  parol  evidence  cannot, 
at  common  law,  be  received  even  to  effectuate  the  intention  of 
the  parties,^  nor  can  it  be  received  where  by  the  terms  of  a 
simple  contract  it  clearly  appears  that  exclusive  rights  and 
credit  were  given  to  the  agent.* 

It  follows  that  there  are  three  cases  in  which  the  agent  also 
can  sue :  (1)  where  the  agent  contracts  by  deed  in  his  own 
name  ;  (2)  where  the  agent  contracts  in  a  negotiable  instru- 
ment in  his  own  name  ;  (3)  where  by  the  terms  of  a  contract 
rights  under  it  are  expressly  restricted  to  the  ngent.^  Where 
one  contracts  really  for  himself,  but  ostensibly  for  another 
whom  he  does  not  name,  he  may  sue  as  principal.*^  In  other 
cases  of  simple  contracts  made  for  an  undisclosed  or  unnamed 
principal,  the  principal  may  sue,  although  the  agent  may  also 
sue  in  some  cases.'' 

2.   Quasi- Contract  Obligations. 
§  166.     Money  paid  by  mistake. 

It  is  a  general  |)rinciple  of  the  law  that  money  paid  under  a 
mistake  of  material  fact,  in  the  belief  that  it  is  due,  may  be 
recovered  back  in  an  action  for  money  had   and  received, 

1  Ante,  §§  129-135.  "  Post,  §  197. 

«  Post,  §§  188,  189.  *  Ante,  §  132;  post,  §  186. 

6  Post,  §  207.  *  Dicey  on  Parties,  Rule  18. 

^  Post,  §  208. 


LIABILITY    OF   THIRD    PARTY.  215 

where  it  would  be  against  conscience  for  the  payee  to  retain 
it.^  The  action  is  based  on  equitable  principles  and  proceeds 
upon  the  fiction  that  the  defendant  promised  to  pay  the  money 
back.  In  this  action  it  is  immaterial  whether  the  principal 
paid  the  money  in  person  or  through  an  agent ;  in  either  case 
he  is  entitled  to  proceed  in  quasi  contract  for  his  remedy. 
Accordingly  a  principal  may  maintain  an  action  for  money 
had  and  received  against  a  third  person  to  whom  an  agent 
has  paid  it  under  a  mistalce  of  fact,^  or  which  is  paid  by  him 
under  a  mistake  originating  with  his  agent,^  or  with  a  public 
or  quasi-public  officer,  on  the  strength  of  whose  certificate  he 
relies.*  The  government  may  recover  in  this  way  money  paid 
by  one  of  its  agents  under  a  mistake  or  misinterpretation  of 
law.^ 

§  167.     Money  paid  under  duress  or  fraud. 

Where  a  third  person  obtains  from  an  agent  by  duress  or 
fraud  moneys  belonging  to  the  principal,  the  latter  may  re- 
cover the  moneys  so  paid  by  his  agent  in  an  action  for  money 
had  and  received.^  Such  actions  may  always  be  maintained 
by  the  real  party  in  interest  since  they  do  not  rest  upon  priv- 
ity of  contract,  but  upon  the  contract  created  by  the  law.'''  If 
an  agent  is  compelled  to  pay  illegal  charges  for  the  protection 
of  his  principal's  interests,  the  latter  cannot  proceed  against 
the  agent  but  must  proceed  against  the  one  making  the  unjust 
exaction.^  The  agent  as  well  as  the  principal  may,  however, 
proceed  against  the  third  party  for  the  amount  so  paid  under 
duress.* 

^  Keener  on  Quasi-Cont.,  Ch.  IT. 

2  United  States  v.  Bavtlett,  Daveis  (U.  S.  Dist.  C),  9,  s.  c.  2  "Ware,  17. 

3  Lane  v.  Pere  Marquette  Boom  Co.,  02  jNIich   63. 

*  Talbot  V.  National  Bank,  129  Mass.  07;  Holmes  v.  Lucas  Co.,  53 
Iowa,  211. 

5  McElrath  r.  United  States,  102  U.  S.  426 ;  Wisconsin  Central  R.  v. 
United  States,  164  U.  S.  190  ;  United  States  i'.  Dempsey,  104  Fed.  Rep. 
197. 

^  Stevenson  v.  Mortimer,  Cowp.  805 ;  Demarest  r.  Barbadoes,  40  N. 
J.  L.  604. 

7  Stevens  v.  Fitch,  11  Mete.  (Mass.)  248 

^  Holman  v.  Frost,  26  S.  C.  290.      ^  Stevenson  v.  Mortimer,  supra. 


216  PKIXCirAL   AND   THIRD   PARTY. 

Whore  money  belonging  to  tlic  principal  has  been  diverted 
by  the  agent  into  the  hands  of  a  third  person  who  takes  with 
notice  of  tiie  breach  of  trust,  the  latter  is  lial)lc  to  the  princi- 
jial  in  ^(jiiiiy,  and  in  some  States  in  quasi-contract,  as  for 
money  iiad  and  received.^ 

3.   Tort  Obligations. 

§  168.     Property  diverted  by  agent. — General  rule. 

Where  an  agent  disjwses  of  his  principal's  property  beyond 
the  scope  of  the  authority,  the  principal  may  recover  it  from 
any  one  into  whose  hands  it  has  passed.^  This  doctrine  rests 
upon  the  maxims  that  a  buyer  gets  no  better  title  than  the 
seller  had  to  give  him,  and  that  an  owner  cannot  be  divested 
of  his  title  without  his  consent.  The  third  party  is  therefore 
bound  to  show  that  the  agent  had  the  authority  to  transfer 
the  title,  or  that  the  principal's  conduct  has  been  such  as  to 
work  an  estoppel.  Authority  may  be  shown  in  the  usual  ways; 
namely,  by  previous  grant,  by  subsequent  ratification,  by 
necessity,  and  by  estoppel. 

To  the  general  and  sweeping  rule  as  above  stated,  there  are 
two  well  recognized  exceptions  at  the  common  law  and  a  third 
which  has  been  created  by  statute  in  some  jurisdictions.  The 
rule  and  the  common  law  exceptions  are  well  explained  in  the 
case  of  Saltiis  v.  Everett,^  and  may  be  here  briefly  summarized. 

§  169.     Exceptions.     (1)  Negotiable  instruments. 

Where  the  proj)erty  entrusted  to  the  agent  is  currency,  or 
negotiable  paper  transferable  by  delivery,  then  under  the  rules 
of  the  law  merchant,  a  hona  fide  purchaser  for  value  will  take 
a  title  good  against  the  jiriucipal,  even  though  the  agent  ex- 
ceeds his  powers  or  diverts  the  property  to  his  own  uses.*  The 

1  Post,  §§  177-179. 

*  Thompson  v.  Barnum,  49  Iowa,  392 ;  Barker  v.  Dinsmore,  72  Pa.  St. 
427  ;  Jackson  v.  Bank,  92  Tenn.  154;  Morris  v.  Preston,  93  111.  215. 

8  20  Wend.  (N.  Y.)  267. 

■*  Goodwin  v.  Robarts,  L.  R.  1  App.  Cas.  476 ;  London  Stook  Bank 
V.  Simmons,  1892,  App.  Cas.  201  ;  Ayer  v.  Tilden,  15  Gray  (Mass.),  178; 
Bank  r.  Vanderhorst,  32  N.  Y.  553. 


LIABILITY    OF   THIRD    PARTY.  217 

doctrine  is  broader  than  the  application  to  agency,  since  even 
a  thief  can  give  good  title  to  money,  or  paper  that  passes  like 
money.  In  agency,  a  principal  can  follow  money  or  negoti- 
able paper  passing  by  transfer  only  where  it  is  in  the  hands 
of  one  who  took  with  notice  of  his  rights  or  who  did  not  give 
a  valuable  consideration  for  it.  Purchase  without  notice  and 
for  value  cuts  off  the  owner's  rights.  Where  paper  is  restric- 
tively  indorsed,  as  "  for  collection,"  it  is  notice  to  all  subse- 
quent holders  of  the  principal's  title.^ 

But  if  the  money  or  notes  come  into  the  third  party's 
hands  mala  fide,  the  principal  may  recover;  in  the  case  of 
money,  or  notes  turned  into  money,  the  action  may  be  in 
quasi-contract  as  for  money  had  and  received.''^  If  an  agent 
places  his  principal's  money  on  a  wager  and  loses  it,  the 
principal  may  sue  the  winner  and  recover  the  money .^ 

§  170.     Exceptions.     (2)  Indicia  of  ownership;  ostensible  owner- 
ship. 

Where  the  principal  not  only  entrusts  his  property  to  the 
agent,  but  also  clothes  the  agent  with  the  documentary  evi- 
dence of  ownership  of  the  property,  and  third  persons  have 
reason  to  believe  from  such  documentary  evidence  that  the 
agent  is  the  owner,  then  a  bona  fide  purchaser  for  value  will 
be  protected  as  against  the  principal.*  Thus  where  the  prin- 
cipal allows  his  property  to  stand  on  the  books  of  a  wharfinger 
in  the  name  of  his  agent,  he  cannot  set  up  his  title  as  against 
a  purchaser  from  the  agent  ;^  nor  where  he  allows  a  vessel 
to  be  enrolled  in  the  name  of  his  agent  ;^  nor  where  he  allows 
his  agent  in  purchasing  goods  to  take  a  bill  of  sale  in  his  own 

1  Commercial  Bank  v.  Armstrong,  148  U.  S.  50  ;  Butchers',  &c.  Bank 
V.  Hubbell,  117  N.  Y.  384;  Freeman's  Bank  v.  National  Tube  Works, 
151  Mass.  413. 

2  Clarke  v.  Shee,  Cowp.  197. 

8  Vischer  v.  Yates,  11  Johns.  (N.  Y.)  23;  Mason  v.  Waite,  17  Mass. 
560  ;  Donahoe  v.  McDonald,  92  Ky.  123. 

4  Nixon  V.  Brown,  57  N.  H.  34;  McNeil  v.  Tenth  N.  B  ,  46  N.  Y. 
325. 

6  Pickering  v.  Busk,  15  East,  38. 

6  Calais  Steamboat  Co.  v.  Van  Pelt,  2  Black  (U.  S.),  372. 


218  PKI.N'CirAL    AND    TIIIUD    rAKTY. 

naine;^  nor  where,  uudi'r  an  ordinance  which  provides  that 
licenses  shall  be  taken  ont  in  the  name  of  the  owner,  he 
allows  liis  agent  to  take  out  a  license  for  a  public  vehicle  in 
his  own  name.2  In  all  these  and  similar  cases  the  true  owner 
is  estopped  by  his  representation,  or  acquiescence  in  the  rep- 
resentation, as  to  the  agent's  title,  from  setting  uj)  his  own 
against  one  who  purchases  from  the  agent  on  the  strength 
of  the  representation.  But  the  document  must  be  a  represen- 
tation as  to  title  in  order  to  work  an  estoj)pel,  and  the  buyer 
must  rely  upon  it  as  such.^ 

Some  cases  of  ostensible  ownershij)  are  often  confused 
with  the  cases  where  the  princij)al  is  estopped  to  deny  the 
agent's  authority  to  sell  as  agent,  that  is,  with  cases  of  osten- 
sible agency.  But  the  distinction  is  clear.  In  these  cases 
the  buyer  treats  the  seller  as  owner,  and  the  inquii-y  is 
whether  the  conduct  of  the  true  owner  has  been  such  as  to 
work  an  estoppel  against  him  to  deny  such  ostensible  owner- 
ship. In  cases  of  ostensible  agency,  the  buyer  treats  the  seller 
as  agent  for  the  true  owner,  and  the  inquiry  is  whether  the 
conduct  of  the  principal  has  been  such  as  to  create  an  estoppel 
to  deny  the  ostensible  agency.*  Some  cases  decided  on  the 
theory  of  ostensible  agency  might  well  have  been  decided 
upon  the  theory  of  ostensible  ownership.^  Thus  if  one  sends 
his  goods  to  an  auction  room,  but  confers  no  documentary 
indicia  of  title,  it  might  be  reasonably  inferred  that  the 
auctioneer  is  clothed  with  authority  to  sell  them  as  agent.^ 
But  if  one  sends  his  goods  to  the  sales  rooms  of  one  who  sells 
on  his  own  account,  but  not  customarily  as  agent,  and  no 
documentary  indicia  of  title  are  conferred,  the  sole  question 
would  seem  to  be  (in  the  absence  of  express  authority  to 
sell) '  whether  the  proprietor  Is  so  far  ostensible  owner  as  to 

^  Nixon  ('.  Brown,  supra. 

2  McCauley  v.  Brown,  2  Daly  (N.  Y.  C  P.),  426. 
8  Hentz  r.  Miller,  94  N.  Y.  64. 
*  Ewart  on  Estoppel,  pp.  238-250. 

»  Biggs  r.  Evans,  1894,  1  Q.  B.  88;  ante,  §  2,  52;  Ewart  on  Estoppel, 
pp.  484-185. 

8  Lord  Ellenborough  in  Pickering  v.  Busk,  15  East,  38. 
T  Smith  V.  Clews,  105  N.  Y.  283. 


LIABILITY    OF   TIIIKD    TARTY.  219 

estop    the    true   owner   in   case   of    a   sale   to   an   innocent 
purcliaser.^ 

§  171.     Exceptions.     (3)  Factors  Acts. 

A  factor  is  one  whose  business  it  is  to  receive  consignments 
of  goods  and  sell  tlicm  for  a  commission.^  But  a  factor  may 
also  be  a  merchant  buying  and  selling  on  his  own  account. 
Whether  selling  in  his  own  right  or  for  another,  he  may  sell 
in  his  own  name,  and  it  follows  that  an  innocent  purchaser 
may  take  the  goods  by  barter,  or  for  a  pre-existing  debt  of 
the  factor,  or  in  pledge  for  a  contemporaneous  debt,  in  igno- 
rance of  the  fact  that  they  belong  to  an  undisclosed  principal. 
In  any  one  of  these  cases  the  principal  may  reclaim  bis  goods 
as  against  the  innocent  purchaser,  for  it  is  arbitrarily  declared 
to  be  the  rule  of  law  that  the  authority  of  the  factor  is  only 
to  sell  and  not  to  barter,  or  pledge.^ 

Owing  to  the  frauds  made  possible  by  this  rule,  and  deem- 
ing it  better  that  where  one  of  two  innocent  persons  must 
suffer  he  should  bear  the  loss  who  reposed  the  trust  in  the 
wrong-doer,  the  legislatures  in  several  jurisdictions  have 
passed  "Factors  Acts"  for  the  relief  or  protection  of  innocent 
third  parties.  The  most  sweeping  is  the  English  Factors  Act 
of  1889  (52-53  Vict.  c.  45)  which  supersedes  earlier  enact- 
ments beginning  with  4  Geo.  IV.  c.  88  (1823).  The  New 
York  Factors  Act  (1830  c.  179)  is  the  beginning  of  similar 
legislation  in  this  country.^ 

The  New  York  Act  (§  3)  provides  that :  "  Every  factor  or 
other  agent  ^  entrusted  with  the  possession  of  any  bill  of 
lading,  custom-house  permit,  or  warehouse-keeper's  receipt 
for  the  delivery  of  any  such^  merchandise,  and  every  such 

1  Levi  V.  Booth,  58  Md.  305;  Biggs  v.  Evans,  1894,  1  Q.  B.  88. 

2  Ante,  §  111. 

8  Patterson  v.  Tash,  2  Str.  1178;  Newbold  v.  Wright,  4  Rawle  (Pa.), 
195;  Gray  v.  Agnew,  95  111.  315;  Allen  v.  St.  Louis  Bank,  120  U.  S.  20; 
Warner  v.  Martin,  11  How.  (U.  S.)  209. 

*  See  Stimson's  Am.  Statute  Law,  §§  4380-4388.  The  English  and 
New  York  Acts  will  be  found  in  the  Appendix ;  post,  pp. 

6  The  English  Act  reads  "  mercantile  agent." 

«  That  is,  any  such  as  is  described  in  §  1  of  the  Act,  namely,  mer- 
chandise shipped  in  the  name  of  the  agent,  or,  under  this  clause  of  §  3, 


220  PRINCIPAL    AND   THIRD    PARTY. 

factor  or  agent  not  having  the  documentary  evidence  of  title 
who  sliall  be  entrusted  with  the  possession  of  any  merchandise 
for  the  purpose  of  sale,^  or  as  security  for  any  advances  to  be 
made  or  obtained  thereon,^  shall  be  deemed  to  be  the  true 
owner  thereof,"'^  so  far  as  to  give  validity  to  any  contract 
made  by  such  agent  with  any  other  person,  for  the  sale  or 
disposition  of  the  whole  or  any  j)art  of  such  merchandise,  for 
any  money  advanced,  or  negotiable  obligation  in  writing  given 
by  such  other  person  upon  the  faith  thereof." 

The  act  (§4)  further  provides  that  taking  such  merchan- 
dise from  such  an  agent  for  an  antecedent  debt  gives  no  right 
or  interest  other  than  was  possessed  or  might  have  been  en- 
forced by  the  agent  himself ;  and  (§  5)  that  in  any  case  the 
true  owner  may  reclaim  his  property  upon  repaying  the  third 
party  any  advances  made  by  him  or  may  recover  a  balance 
due  from  a  third  party  upon  satisfying  any  demand  justly  due 
such  party.  This  act  has  been  the  subject  of  many  judicial 
decisions,  a  few  of  which  may  be  noted. 

It  is  to  be  observed  that  the  factor  or  agent  must  be  one 
entrusted  (flf)  with  a  document  of  title  as  cnumci-atcd,  or  (6) 
with  possession  of  the  goods  for  the  purpose  of  sale,  or  as 
security  for  advances  to  be  made  or  obtained  thereon.  Calling 
the  agent  a  "  trustee  "  does  not  prevent  the  act  from  operating 
if  the  relation  is  in  fact  that  of  priuci[)al  and  agent.^     But  an 

merchandise  of  which  the  documentary  evidence  of  title  is  in  the  agent's 
name.      First  N.  B.  v.  Shaw,  61  N.  Y.  283,  300. 

'  Under  the  English  Act  tlie  factor  need  not  be  entrusted  with  the 
goods  for  the  purpose  of  sale,  or  as  security  for  advances;  it  is  enough 
that  he  is  in  possession  with  the  consent  of  the  owner.  The  Xew  York 
Act  expressly  provides  that,  "  Nothing  contained  in  this  act  shall  author- 
ize a  common  carrier,  warehouse-keeper,  or  other  Y)erson  to  whom  mer- 
chandise or  other  property  may  be  committed  for  transportation  or 
storage  only,  to  sell  or  hypothecate  the  same."  §  7.  This  same  result  is 
reached  in  the  English  Act  by  limiting  the  Act  to  "  mercantile  agents." 

2  This  is  ostensible  ownership.  The  English  Act  reads,  "any  sale, 
pledge,  or  otlier  disposition  .  .  .  shall ...  be  as  valid  as  if  he  were  expressly 
authorized  by  tlie  owner  of  the  goods  to  make  the  same.''  This  is  osten- 
sible agency  in  form. 

8  Xew  York  Security  &  Trust  Co.  v.  Lipman,  91  Hun,  554,  allirmed, 
157  N.  Y.  551. 


LIABILITY    OF    THIRD    PARTY.  221 

employee  in  the  owner's  store  or  place  of  business  is  not  such 
an  agent,  because  in  such  case  the  possession  of  the  agent  is 
the  possession  of  the  owner,  and  not  such  a  "  possession  for 
the  purpose  of  sale  "  as  is  meant  in  the  act.^  But  the  posses- 
sion of  a  travelling  salesman  is  possession  by  the  agent  within 
the  meaning  of  the  act.^  Possession  of  the  goods  must  be 
for  one  of  the  purposes  enumerated  in  order  that  the  act  shall 
apply .^  Actual  and  not  merely  constructive  possession  is 
necessary  in  the  absence  of  documentary  evidence  of  title;* 
and  such  possession  must  have  been  given  voluntarily  by  the 
principal,  for  if  the  agent  obtains  the  goods  by  trespass  or 
fraud  he  is  not  entrusted  with  thcm.^  If  the  agent  be  en- 
trusted with  a  document  of  title  this  must  be  in  his  name.^ 
He  must  have  been  entrusted  with  it  by  the  owner ;  ^  but  en- 
trusting a  factor  with  a  primary  document  out  of  which  the 
one  dealt  with  grows,  is  the  same  as  entrusting  him  with  the 
latter  directly.^  The  documents  of  title  to  which  the  act 
applies  are  only  the  three  enumerated.^ 

It  is  to  be  observed  that  the  third  party  must  have  made 
a  contract  of  sale,  pledge,  or  otherwise,  "  upon  the  faith 
thereof,"  that  is,  upon  the  faith  of  the  appearance  of  owner- 
ship in  the  agent.  To  entitle  the  third  party  to  the  protec- 
tion of  the  statute,  it  must  appear  that  he  believed  the  factor 
to  be  the  true  owner.^^  One  making  advances  to  a  factor 
upon  goods  know^n  not  to  be  the  goods  of  the  factor  cannot 
claim  an  estoppel  under  this  act."    But  a  mere  delay  between 

1  Sage  V.  Shepard  &  Morse  Lumber  Co.,  4  N.  Y.  App.  Div.  290,  af- 
firmed, 158  N.  Y.  672. 

2  Cairns  v.  Page,  165  Mass.  552. 

3  Moors  V.  Kidder,  34  Hun,  534,  affirmed,  106  N.  Y.  32. 
*  Howland  v.  Woodruff,  60  N.  Y.  73. 

5  Kinsey  v.  Leggett,  71  N.  Y.  387;  Soltau  v.  Gerdau,  119  N.  Y.  380  •, 
Prentice  Co.  v.  Page,  164  Mass.  276. 

6  First  N.  B.  v.  Shaw,  61  N.  Y.  283. 

'  Bonito  ('.  Mosquera,  2  Bosw.  (N.  Y.)  401. 
8  Cartwright  v.  Wilmerding,  24  N.  Y.  521. 

^  Bonito  V.  Mosquera,  2  Bosw.  (N.  Y.)  401;  Western  Transp,  Co.  v. 
Barber,  50  N.  Y.  544. 

10  Stevens  v.  Wilson,  3  Den.  472 ;  approved,  6  N.  Y.  380. 

11  Covell  V.  Hill,  6  N.  Y.  374. 


222  PRINCIPAL   AND   THIRD   TARTY. 

tlic  time  of  the  advance,  and  the  actual  transfer  of  the  pledge, 
is  not  fatal,  if  the  advance  was  made  on  the  faith  thereof.^ 

Tlie  effect  of  the  Factors  Acts  is  merely  to  extend  the 
general  doctrine  of  estoppel  to  the  correction  of  an  especially 
narrow  judicial  dogma.  The  courts  decided  that  a  factor 
could  not,  without  express  authority,  pledge  his  principal's 
goods,  whatever  ai)ijearance  of  authority  or  of  ownership  he 
might  be  vested  with.^  Some  courts  have  deplored  this  dog- 
matic rule,  but  have  felt  bound  by  it.^  The  legislatures  have 
aided  the  courts  by  extending  the  doctrines  of  estoppel  to  this 
set  of  facts.* 

§  172.     Forms  of  action  for  property  or  its  value. 

Wlien  the  principal's  property  has  been  converted  by  the 
third  party,  the  principal  has  his  choice  of  several  remedies. 
If  the  property  is  still  in  the  hands  of  the  third  party,  an  action 
of  replevin  will  lie  for  its  recovery  or  an  action  of  trover  for 
its  value.  If  it  has  been  sold  by  the  third  party,  the  tort  may 
be  waived  and  an  action  of  assumpsit  brought  as  for  money 
had  and  received;^  and  in  some  jurisdictions  when  the  goods 
liave  not  been  sold,  but  have  been  kept  or  consumed,  the  prin- 
cipal may  waive  the  tort  and  sue  in  assumpsit  as  for  goods 
sold  and  delivered.''  If  the  third  party  took  the  property  with 
notice  of  the  principal's  rights  or  without  giving  a  valuable 
consideration,  and  has  converted  it  into  another  form  of  prop- 
erty, equity  will,  in  many  cases,  fasten  a  trust  upon  the 
property  so  obtained,  and  enforce  the  trust  in  favor  of  the 
principal.'^     In  the  case  of  money,  an  action  for  money  had 

1  Cartwright  v.  AVilmerding,  24  N.  Y.  521. 

2  Patterson  v.  Tash,  2  Str.  1178;  Newbold  v.  Wright,  4  Rawle  (Pa.), 
195;  Gray  r.  Agnew,  95  111.  315. 

8  Pickering  v.  Busk,  15  East,  38;  Martini  v.  Coles,  1  M.  &  S.  140; 
Horr  V.  Barker,  11  Cal.  393. 

*  See  for  an  admirable  review  of  this  legislation,  and  its  relation  to  the 
doctrines  of  estoppel,  Ewart  on  Estoppel,  pp.  353-369. 

^  Keener  on  Quasi-Cont.,  p.  170  et  seq. 

0  Ibid.,  pp.  192-195. 

'  Post,  §  177. 


LIABILITY    OF   TIIIUD    PARTY.  223 

and  received  will  lie  against  successive  holders  until  it  comes 
into  the  hands  of  a  bona  fide  holder  for  value. ^ 

§  173.     Wrongs  of  fraud  and  malice. 

The  third  person  may  become  liable  to  the  principal  in  tort, 
aside  from  cases  of  conversion  of  property  already  noticed, 
either:  (1)  for  a  fraud  connected  with  a  contract  entered  into 
between  the  agent  and  the  third  person  in  behalf  of  the  prin- 
cipal ;  (2)  for  a  fraud  committed  on  the  principal  by  collusion 
between  the  agent  and  the  third  person  ;  (3)  for  an  unlawful 
interference  with  the  agent  in  the  discharge  of  his  duties,  or 
with  the  contract  of  agency.  These  classes  of  torts  generally 
involve  either  fraud  or  malice,  —  fraud  in  inducing  the  prin- 
cipal to  enter  into  a  contract,  or  malice  in  unlawfully  inter- 
fering with  a  contract  which  the  principal  has  already  made. 

§  174.     Frauds  in  making  contract. 

We  have  already  seen  that  a  principal  is  liable  for  the 
frauds  of  his  agent  committed  while  making  contracts  with 
third  persons.  Conversely  the  third  person  is  liable  to  the 
principal  for  frauds  practised  on  the  agent  while  the  latter 
is  acting  in  behalf  of  the  principal,  since  every  person  is  liable 
for  his  own  torts  to  the  person  injured  thereby.  This  proposi- 
tion needs  no  discussion.  It  extends  to  frauds  for  which  an 
action  for  deceit  will  lie,  as  well  as  to  those  for  which  the 
remedy  is  merely  rescission  of  the  contract.^ 

§  175.     Collusive  fraud  between  agent  and  third  person. 

The  third  person  and  the  agent  may  combine  to  commit 
a  fraud  upon  the  principal.  In  such  a  case  they  are  joint  tort 
feasors,  and  both  are  liable  for  the  injury.  Accordingly  the 
principal  may  maintain  an  action  against  the  third  person, 
or  the  agent,  or  both  jointly.^  The  fact  that  the  agent  may  be 
held  for   his  breach  of  trust   does  not  prevent  a  recovery 

^  Keener  on  Quasi-Cont.,  pp.  183-188. 

2  Gushing  v.  Rice,  46  Me.  303;  Perkins  c.  Evans,  61  Iowa,  35;  White 
V.  Owen,  12  Vt.  361. 

*  Boston  V.  Simmons,  150  Mass.  401;  Mayor  i*.  Lever,  1891,  1  Q.  B. 
168. 


224  PRINCirAL    AND    TIIIKD    l^VUTY. 

against  the  tliird  person,  since  the  agent  is  guilty  of  two 
wrongs :  first,  for  his  l)reach  of  trust  as  agent ;  and  second, 
for  the  consuniniated  consj)iracy  with  the  third  person  to 
injure  the  })hiintiff.^  If  a  contract  has  hcen  made  where  the 
agent  was  in  collusion  with  the  third  jjci'son,  the  i)rinci{)al 
may  repudiate  it-  and  recover  damages  either  in  tort  or 
assumpsit.^  So  where  the  third  person  knows  that  the  agent 
is  committing  a  fraud  on  his  princii)al,  he  becomes  a  party  to 
the  fraud  by  contracting  witli  such  knowledge,  and  the  con- 
tract may  be  avoided  by  the  principal/* 

§  176.     luterference  with  agency. 

The  third  person  is  liable  to  the  principal  for  unlawfully 
interfering  with  the  agent  or  the  agency.  He  is  liable  if  he 
unlawfully  injures  the  agent,  and  thereby  renders  him  unfit 
to  perform  the  duties  of  the  agency;^  or  if  he  unlawfully 
interferes  with  the  agent  in  the  performance  of  the  duties  of 
the  agency.*^  He  is  also,  liable  for  unlawfully  inducing  the 
agent  to  break  his  contract  of  employment  with  the  principal,^ 
though  some  cases  hold  that  he  is  liable  only  where  he  has 
used  unlawful  means,  as  force,  threats,  or  fraud.^  Whether 
the  act  of  the  third  person  in  inducing  the  breach  can  ever  be 
justified,  and  if  so  on  what  grounds,  seems  not  to  be  decided. 
The  doctrine  has  become  much  broader  in  its  application  than 
inducing  breach  of  contracts  of  employment,  and  extends  to 
breach  of  contract  generally.'*     Whctlior  there  is  any  remedy 

1  Mayor  v.  Lever,  supra ;  Keator  v.  St.  John,  42  Fed.  Rep.  585. 

^  Smith  V.  Sorby,  3  Q.  R.  D.  552  n.;  Panama,  &c.  Co.  v.  India  Rubber 
Co.,  L.  R.  10  Ch.  App.  515;  Miller  v.  R.  R.  Co.,  83  Ala.  274. 

3  City  of  Findlay  v.  Pertz,  60  Fed.  Rep.  427;  Gluspie  r.  Keator,  56 
Fed.  Rep.  203. 

*  Hegenmyer  v.  Mark.s,  37  IMinn.  6. 

6  Ames  r.  Union  Ry.  Co.,  117  Mass.  541;  Daniel  v.  Swearengen,  6  S. 
C.  297  ;  po.«f,  §  296. 

6  St.  Johnsbury,  &o.  R.  Co.  v.  Hunt,  55  Vt.  570. 

■?  Lumley  v.  Gye,  2  El.  &  Bl.  216;  Walker  v.  Cronin,  107  Mass.  555; 
Haskins  v.  Royster,  70  N.  C.  601.    Bigelow  on  Torts  (7th  ed.),  §§  216,  247. 

8  Rourlier  v.  Macauley,  91  Ky.  135. 

»  See  Temperton  v.  Rus.scll,  1893,  1  Q.  B.  715;  Angle  v.  Chicago,  &c. 
Ry.,  151  U.  S.  1 ;  post,  §  298. 


LIABILITY    OF   THIRD    PARTY.  225 

for  inducing  by  persuasion   the    termination  of   a   contract 
terminable  at  will,  is  in  dispute.^ 

If  the  principal  brings  an  action  for  the  loss  of  the  services 
of  his  agent  occasioned  by  a  negligent  injury  at  the  hands  of 
a  third  party,  it  seems  that  the  contributory  negligence  of  the 
agent  would  be  a  bar  to  his  recovery,  though  the  principal  is 
personally  free  from  blame.^ 

4.     Trust  Obligations. 

§  177.     Constructive  trusts. 

Constructive  trusts  arise  where  one  person  has  obtained 
money  or  property  which  does  not  equitably  belong  to  him 
and  which  does  equitably  belong  to  another.  Although  the 
one  so  obtaining  the  property  of  another  has  never  expressly 
or  impliedly  undertaken  to  hold  it  as  trustee,  yet  equity 
fastens  upon  him  the  character  of  a  trustee  and  compels 
him  to  account  to  the  beneficial  owner  as  such.-^  The  trust 
so  "  constructed  "  by  equity  is  analogous  to  the  contract  "  con- 
structed "  by  the  common,  law  in  cases  of  quasi-contract. 

§  173.     Following  trust  funds. 

If  an  agent  has  come  into  the  possession  of  property  or 
funds  which  are  impressed  with  a  trust  in  favor  of  his 
principal,  the  principal  may  follow  such  property  or  funds, 
or  the  proceeds  of  such  property,  so  long  as  they  can  be 
identified,  or  until  they  reach  the  hands  of  a  bona  fide  pur- 
chaser for  value.*  And  if  they  become  so  commingled  with 
the  property  or  funds  of  the  agent  that  identification  is  im- 
possible, the  entire  mass  will  be  subject  to  a  charge  in  favor 
of  the  principal  to  the  amount  of  the  trust  fund.'^ 

1  Ante,  §  159;  post.  §§  298-290. 

2  Chicago,  B.  &  Q.  R.  r.  Honey,  63  Fed.  Rep.  39. 
^  2  Pomeroy's  Eq.  Jurisp.  §  1047. 

4  Roca  V.  Byrne,  145  N.  Y.  182;  Peak  v.  Ellicott,  30  Ivans.  156;  Van 
Alen  y.  Am.  Nat.  Bk.,  52  N.  Y.  1 ;  Nat.  Bk.  v.  Ins.  Co.,  104  U.  S.  54; 
:McLeod  V.  Evans,  66  Wis.  401;  Knatclibull  v.  Ilallett.  L.  R.  13  Ch.  Div. 
696. 

5  Peak  V.  Ellicott,  30  Kans.  156;  Frith  i--.  Cartland,  34  L.  J.  Ch.  301; 
Broadbent  v.  Barlow,  3  DeG.  F.  &  J.  570. 

15 


226  Pl'JNCII'AL    AND    THIRD    PARTY. 

In  accordance  with  (his  ixcneral  doctrine,  it  is  lield  that 
if  a  third  person  obtains  from  an  agent  tlie  property  of  the 
principal  nnder  cii-cumstanccs  which  give  the  third  i)erson 
no  equitahle  claim  to  it,  equity  will  fasten  upon  the  property 
a  trust  for  the  benefit  of  the  principal,  and  '■'•  will  follow  the 
fund  through  any  number  of  transmutations  and  preserve 
it  for  the  owner  as  long  as  it  can  be  identified,"  ^  or  until 
it  passes  into  the  hands  of  a  bona  fide  purchaser  for  value. 
It  is  not  necessary  that  the  trustee  should  be  guilty  of  an 
intent  to  defraud  the  principal ;  he  may  intend  no  moral 
wrong,  yet  if  he  comes  into  the  possession  of  the  property 
with  notice  of  the  principal's  rights,  or  as  a  volunteer  not 
taking  for  value,  he  is  declared  to  hold  in  trust  for  the  prin- 
cipal.^ It  is  only  where  the  superior  equity  of  a  bona  fide 
purchaser  for  value  intervenes,  or  where  the  doctrine  of 
estoppel  can  be  invoked,  that  the  right  of  the  principal  to 
pursue  the  trust  fund  is  cut  off.^  It  is  under  the  application 
of  this  doctrine  that  banks  are  not  allowed  a  banker's  lien  or 
right  of  set-off  against  funds  deposited  by  the  agent  where 
the  bank  knows  that  the  funds  l)elong  to  the  principal ;  *  that 
attaching  creditors  of  the  agent  are  not  allowed  to  reach  the 
fund  so  deposited  ;^  and  that  a  donee  of  the  fund,  or  of  prop- 
erty purchased  with  it,  is  declared  to  l)o  a  trustee  for  the 
lienefit  of  the  jjrincipal.''  So  also  neither  the  assignee  in  bank- 
ruptcy of  an  agent,  nor  the  creditors  of  the  agent,  can  claim,  as 
against  the  principal,  any  money  or  property  entrusted  by  the 
princi])al  to  the  agent.'' 

In  order  that  the  right  to  follow  the  fund  should  exist  it 
is  necessary  that  it  be  a  fund  to  which  title  was  in  the  prin- 
cipal   before    the   diversion.     Where    an    agent   fraudulently 

1  Farmers',  &c.  Bank  r.  King,  57  Pa.  St.  202. 

2  2  Pomeroy's  Eq.  Jurisp.  §  1048. 
8  Anfe,  §§  169-171. 

*  National  Bank  v.  Tns.  Co.,  104  U.  S.  54;  Baker  v.  New  York  N.  B., 
100  N.  Y.  31 ;  Union,  &c.  Bk.  v.  Gillespie,  137  U.  S.  411. 

^  Farmers',  &c.  Bk.  v.  King,  supra. 

*  Riehl  c.  Evansville  F'oundry  Ass'n,  10 1  Ind.  70. 

''  Scott  V.  Surman,  Willea,  400;  Taylor  v.  Plunier,  3  M.  &  S.  562;  Ex 
pane  Cooke,  4  Ch.  Div.  123;  Harris  v.  Truman,  9  Q.  B.  D.  264. 


LTAIilLTTY   OF   THIRD    PARTY.  227 

took  commissions  from  third  persons  and  then  invested  the 
fund  so  received,  it  was  held  that  the  principal  could  not 
follow  the  fund  into  the  investments,  since  it  was  not  a  fund 
previously  helonging  to  him,  but  a  debt  due  him  from  the 
agent  for  which  an  action  for  money  had  and  received  was 
an  appropriate  remedy.^  It  is  further  necessary  that  the 
fiduciary  relationship  of  principal  and  agent  should  be  estab- 
lished. If  the  relation  is  any  other,  as  vendor  and  vendee, 
the  fund  is  that  of  the  independent  operator  and  cannot  be 
followed.^ 

§  179.     Legal  remedies  for  diversion  of  trust  fund. 

The  doctrine  of  following  trust  funds  is  a  peculiarly  equit- 
able one,  and  it  has  been  held  that  the  only  remedy  in  such 
cases  is  in  equity .^  But  owing  to  the  peculiarities  of  the 
history  of  equity  jurisdiction  in  some  of  the  States,  legal 
remedies  based  on  equitable  principles  are  available.*  In 
such  jurisdictions  actions  for  money  had  and  received  may 
be  maintained  by  the  principal  against  third  parties  into 
whose  hands  the  fund  has  passed.  And  if  the  principal's 
money  has  been  converted  to  the  use  of  the  third  party,  it 
may  be  followed  until  it  reaches  the  hands  of  a  bona  fide 
holder  for  value,  and  recovered  in  an  action  as  for  money 
had  and  received.^ 

1  Lister  v.  Stubbs,  L.  R.  45  Ch.  Div.  1. 

2  Ex  parte  White,  L.  R.  6  Ch.  App.  397;  ante,  §  3. 
8  Xational  Bank  v.  Ins.  Co.,  104  U.  S.  54. 

4  Frazier  v.  Erie  Bank,  8   Watts  &  Serg.  (Pa.)  18;   Shaffer  y.  Mont, 
gomery,  05  Pa.  St.  329;  Frue  v.  Loring,  120  Mass.  507. 
6  Keener  on  Quasi-Cont.,  pp.  183-188. 


PART  IV. 

LEGAL  EFFECT  OF  THE  RELATION  AS  BETWEEN  THE 
AGENT  AND  THIRD  PARTIES. 

§  180.     Introduction. 

We  must  once  more,  and  for  the  last  time,  shift  our  point 
of  vicsv.  We  have  now  to  consider  the  mutual  rights  and 
obligations  that  may  spring  up  between  the  agent  and  the 
third  party  in  consequence  of  the  manner  in  which  the  agent 
conducts  himself  toward  the  third  party  or  the  third  party 
toward  the  agent.  Obviously  it  is  not  the  purpose  of  the 
agent  or  the  third  party  to  create  obligations  as  between 
themselves,  and  yet  through  carelessness,  ignorance,  mistake, 
or  fraud  this  may  result.  We  will  consider  the  subject 
under  two  heads:  (1)  mutual  rights  and  obligations  arising 
from  contract;  (2)  mutual  rights  and  obligations  arising 
from  tort. 


LIABILITY   IN   CONTRACT.  229 


CHAPTER  XV. 

CONTRACT   RELATIONS   BETWEEN   AGENT   AND   THIRD   PARTY. 

§  181.     Questions  to  be  considered. 

Where  an  agent  outers  into  a  contract  on  behalf  of  his 
principal,  he  may  bind  the  principal,  or  himself,  or  both, 
or  neither;  but  different  rules  govern  the  liability  of  pub- 
lic agents.  Where  an  agent  has  money  equitably  belonging 
to  a  third  person  but  which  he  assumes  to  hold  for  his  princi- 
pal, he  may  be  liable  to  the  third  person  in  quasi-contract. 
On  the  other  hand,  an  agent  who  is  under  obligations  to  the 
third  party  may  have  rights  commensurate  with  his  obli- 
gations. This  chapter  deals  therefore  with  the  following 
topics :  — 

1.  Where  the  principal  alone  is  bound  by  the  contract. 

2.  Where  the  agent  alone  is  bound  by  the  contract. 

3.  Where  both  principal  and  agent  are  bound  by  the 
contract. 

4.  Where  neither  principal  nor  agent  is  bound  by  the 
contract. 

5.  Special  rules  applicable  to  public  agents  as  to  liability 
upon  contract. 

6.  Liability  of  agent  in  quasi-contract. 

T.  Liability  of  the  third  person  to  the  agent  upon  the 
contract. 

1.      Where  the  Principal  alone  is  hound. 
§  182.     Authorized  contract. 

Where  the  agent  acts  within  the  apparent  scope  of  his 
authority  for  a  disclosed  principal,  and  contracts  in  the 
name  of   that  principal,  the  latter   alone   is  bound  by   the 


230  AGENT   AND    THIRD    PARTY. 

contract.^  So  where  a  principal,  with  full  knowledge  of  the 
facts,  ratifies  an  unauthorized  contract  made  in  his  name  and 
on  his  behalf,  the  principal  alone  is  bound  by  the  contract.^ 

Whether  a  written  contract  is  made  in  the  name  of  the 
principal,  or  in  the  name  of  the  agent,  is  a  matter  of 
construction.^ 

Whether  a  verbal  contract  was  made  in  tlie  name  of  the 
principal,  and  on  his  behalf,  is  a  question  of  fact  for  the 
jury> 

2.      Where  the  Agent  alone  is  bound. 

§  183.     (I)  Unauthorized  contract. 

Where  the  agent  knowingly,  negligently,  or  mistakenly 
holds  himself  out,  either  expressly  or  impliedly,  as  having 
authority  to  act  for  a  principal  in  a  particular  transaction, 
when  in  fact  he  has  no  such  authority,  he  is  liable  to  the 
third  party  who  deals  with  him  on  the  strength  of  such 
representation  for  any  damage  the  latter  may  suffer  in  con- 
sequence of  any  change  of  his  legal  relations  induced  by 
the  representation.^  The  question  remains,  in  what  kind  of 
an  action  may  the  third  party  pursue  his  remedy  ? 

(1)  Agent  not  liable  upon  the  contract.  It  is  now  gen- 
erally agreed  that  the  agent  does  not  bind  liimsclf  upon 
the  contract.  He  does  not  bind  his  principal  because  he 
lias  no  authority  to  do  so ;  he  does  not  bind  himself  because 
he  is  not  a  party  to  the  contract,  and  the  courts  will  not 
create    a   new   contract   either   against   or   in   favor   of    the 

1  Owen  V.  Gooch,  2  Esp.  567;  Ex  parte  Ilartop,  12  Ves.  3-19;  Robins 
V.  Bridge,  3  M.  &  W.  114;  Whitney  i'.  Wyman,  101  U.  S.  392;  Bonynge 
r.  Field,  81  N.  Y.  159;  Covell  t'.  Hart,  14  Ilun  (N.  Y.),  2.V2. 

2  Spittle  V.  Lavender,  2  Brod.  &  Biiig.  452;  Grant  v.  Beard,  50  X.  H. 
129;  Brown  v.  Bradlee,  1.50  Mass.  28;  ante,  §§  46-49,  101. 

8  Downnian  v.  Williams,  7  Q.  B.  103;  Southwell  v.  Bowditch,  1  C.  P, 
I).  374;  Gadd  v.  Houghton,  1  Ex.  Div.  357;  post,  §§  186,  188,  189-195. 
197. 

*  Jones  V.  Littledale,  6  A.  &  E.  486;  Holding  v.  Elliott,  5  H.  &  N. 
117 ;  Williamson  v.  Barton,  7  H.  &  N.  899 ;  Long  v.  Millar,  4  C.  P.  Div. 
450. 

6  CoUen  V.  Wright,  7  El.  &  Bl.  301 ;  Kroeger  r.  Pitcairn,  101  Pa.  St. 
311. 


LIABILITY    IN    CONTRACT.  231 

agent.^  Some  early  New  York  cases  ^  which  held  that  an 
action  would  lie  upon  the  contract,  must  be  regarded  as 
overruled,''  and  other  cases  holding  a  similar  doctrine^  as 
opposed  to  the  weight  of  authority. 

(2)  A(j'  nt  liable  as  for  breach  of  warranty  of  authority. 
Where  the  agent  innocently  exceeds  his  authority  under  cir- 
cumstances not  amounting  to  deceit,  no  action  in  tort  can 
be  maintained.^  Yet  clearly  the  third  party  has  suffered  as 
great  an  injury  as  if  the  representation  had  been  made 
fraudulently.  In  order  to  provide  a  remedy  in  such  an  emer- 
gency, the  courts  have  invented  the  fiction  that  the  agent 
"warrants"  his  authority  wiienever  he  makes  a  contract 
for  his  principal,  and  allow  an  action  for  damages  for  the 
breach  of  this  warranty  of  authority.^  The  fiction  is  well 
enough,  but  it  should  not  be  allowed  to  disguise  the  fact 
that  this  is  a  plain  exception  to  the  rule  that  no  action  lies 
for  an  innocent  misrepresentation.''  It  serves  the  additional 
purpose  of  giving  an  action  against  the  estate  of  the  agent 
after  his  death,  whereas  a  tort  action  would  not  survive.^ 
This  rule  is  subject  to  the  qualification  that  if  the  agent  acts 
in  good  faith,  and  the  third  party  has  full  knowledge  of  all 
the  facts  upon  which  the  agent's  belief  is  founded,  there  is 


1  Ballon  V.  Talbot,  16  Mass.  461 ;  J^IcCurdy  v.  Rogers,  21  Wis.  199 ; 
Duncan  v.  Niles,  ;}2  111.  532;  Hall  v.  Craudall,  29  Cal.  568;  Cole  v. 
O'Brien,  34  Xeb.  68;  Noyes  v.  Loving,  55  Me.  408;  Jenkins  r.  Hutchin- 
son, 13  Q.  B.  744  ;  Lewis  v.  Nicholson,  18  Q.  B.  503  ;  Pollock  on  Cont. 
(6th  ed.)  101-103. 

2  Dusenbury  v.  Ellis,  3  Johns.  Cas.  70 ;  White  v.  Skinner,  13  Johns. 
307. 

3  White  V.  Madison,  26  N.  Y.  117 ;  Dung  r.  Parker.  52  X.  Y.  494 ; 
Baltzen  v.  Nicolay,  53  N.  Y.  467 ;   Simmonds  v.  Moses,  100  N.  Y.  140. 

4  Dale  c.  Donaldson,  48  Ark.  188;  Weare  v.  Gove,  44  N.  H.  196. 

5  Ante,  §  152. 

6  Collen  V.  Wright,  8  El.  &  Bl.  647;  Suart  v.  Haigh,  9  T.  L.  Pv.  488; 
Baltzen  v.  Nicolay,  53  N.  Y.  467;  Kroeger  v.  Pitcairn,  101  Pa.  St.  311; 
Weare  v.  Gove,  44  N.  H.  196  ;  Trust  Co.  v.  Floyd,  47  Oh.  St.  525;  See- 
berger  v.  McCormick,  178  111.  404,  415-419. 

■?  Firbank's  Ex'rs  v.  Humphreys,  18  Q   B.  D.  54. 
8  Pollock  on  Torts  (5th  ed.),  pp.  60,  note  k,  508. 


H.ili  ACENT    AND    THIRD    PAIiTY. 

no  implied  warranty,^  and  to  the  further  qualification  that 
if  the  a<rcnt  expressly  or  impliedly  states  he  docs  not  war- 
rant iiis  authority,  the  implication  of  a  warranty  is  rebutted.'^ 
It  is  neecssai-y,  further,  in  order  that  tlie  action  may  be 
maintained,  that  tlie  contract  made  by  the  agent  should  be 
one  which  would  be  valid  and  enforceable  against  the  j)rin- 
cij)al   if  the  agent  had  been  duly   authorized.^ 

(3)  Aijent  liable  in  tort  for  wilful  deceit.  If  the  agent 
wilfidly  misrepresents  his  authority,  by  express  declaration 
or  by  contract,  he  is  liable  to  the  injured  party  in  an  action 
of  deceit.'*  The  action  ex  delicto  rests  upon  the  wilful  or 
reckless  conduct  of  the  agent.  If,  as  suggested  above,  the 
fiction  of  implied  w'arranty  were  rejected,  and  the  action 
based  upon  the  representation,  whether  innocent  or  guilty, 
an  innocent  misrepresentation  by  an  agent  would  escape  the 
general  rule  that  deceit  requires  wilfid  or  reckless  repre- 
sentations. It  is  necessary  that  the  other  elements  of  deceit 
be  present.  The  third  party  must  actually  be  deceived.  If 
he  knows  all  the  facts,  the  agent  is  not  liable.^ 

(4)  Pleasure  of  damage  for  breach  of  ivarranty  of  authority. 
The  measnre  of  damages  for  breach  of  a  warranty  of  author- 
ity by  an  agent  is  all  the  loss  resulting  from  such  breach 
as  a  natural  and  probable  consequence  thereof.*'  Usually 
this  damage  is  the  same  that  might  have  been  recovered 
against  the  principal  in  case  the  contract  had  been  author- 
ized and  he  had  refused  to  perform  it."  If  the  third  person 
has  brought  an  action  against  the  ])rincipal  and   been  de- 

1  Siiiout  V.  Ilbery,  10  IM.  &  W.  1. 

2  Lilly  V.  Sniales,  1892,  1  Q.  B.  456  ;  post,  §  201. 

8  Baltzen  v.  Nicolay,  53  N.  Y.  467;  Warr  v.  Joues,  21  W.  R.  695; 
Pow  V.  Davis,  1  B.  &  S.  220. 

*  Polhill  V.  Walter,  .3  B.  &  Ad.  114  ;  Rand.-U  v.  Triiueii,  IS  C.  B.  786; 
Noyes  r.  Loring,  55  Me.  408. 

^  Michael  v.  Joiie.s,  81  Mo.  578;  Hall  r.  Lauderdale,  46  X.  Y.  70. 

«  Firbank's  Ex'r.s  r.  Ihiinplirey.s,  18  Q.  B.  1).  54;  Meek  v.  Weiidt,  21 
Q.  B.  I).  126;  Re  National  Coffee  Palace  Co.,  24  (  li.  Div.  3!i7;  Bush  r. 
Cole,  28  N.  Y.  261;  Sininionds  v.  Moses,  100  N.  Y.  140;  Taylor  v.  Nos- 
traud,  134  N.  Y.  108. 

'  Ibid.,  Trust  Co.  v.  Floyd,  47  Oh.  St.  .525;  Seeberger  c.  McCormick, 
178  111.  404,  419. 


LIABILITY   IN   COXTRACT.  233 

featcd  because  of  the  want  of  autliority  of  the  agent,  he 
may,  in  a  subsequent  action  against  the  agent  for  breach 
of  the  warranty  of  authority,  recover  in  addition  to  the 
usual  damages  the  costs  of  the  action  against  the  principal.^ 
If  the  contract  is  unenforceable  against  the  principal  be- 
cause of  some  defect  or  informality,  other  than  the  want  of 
authority  of  the  agent,  no  damages  can  be  recovered  against 
the  agent  based  upon  the  breach  of  his  warranty  of  author- 
ity.'-^ Nor  can  the  equitable  doctrine  of  part  i)erformance 
be  invoked  so  as  to  give  a  remedy  in  equity  for  damages  for 
breach  of  warranty  of  authority.'^  In  order  to  maintain  the 
action  for  damages,  the  third  person  must  show  that  the 
principal  has  repudiated  the  contract  and  that  damage  has 
resulted  to  plaintiff  therefrom.^ 

§  184.     (II)  Incompetent  principal. 

An  agent  is  presumed  to  represent  not  only  that  he  has 
authority  but  that  his  principal  was  competent  to  give  such 
authority  when  it  was  given,  and  has  not  since,  to  the  knowl- 
edge of  the  agent,  become  incompetent.^  A  breach  of  this 
representation  resulting  in  damage  gives  the  same  remedies 
as  a  breach  of  the  representation  as  to  authority.  But  the 
damage  must  have  been  suffered.  If  the  principal  be  one,  as 
an  infant,^  who  may  ratify  or  disaffirm  at  his  election,  it 
must  be  shown  that  he  has  disaffirmed  before  an  action  will 
lie  against  the  agent.'^ 

§  185.     (Ill)  Fictitious  principal. 

Where  an  agent  contracts  for  an  alleged  principal  who 
is  not  in  fact  in  existence  at  the  time,  he  becomes  personally 

1  Riiiulell  r.  Trimen,  18  C.  B.  78G ;  Hughes  v.  Graeme,  3:3  L.  J.  Q.  B. 
333 ;  Godwin  v.  Francis,  L.  R.  5  C.  P.  295. 

2  Pow  V.  Davis,  1  B.  &  S.  220;  Baltzen  v.  Nicolay,  53  N.  Y.  467. 

3  Warr  r.  Jones,  24  AA'eekly  Rep.  695. 

*  Patterson  v.  Lippiucott,  47  N.  Y.  L.  157. 

6  Drew  V.  Nunn,  L.  R.  4  Q.  B.  D.  661 ;  Hoppe  v.  Savior,  53  Mo. 
App.  4. 

^  In  those  jurisdictions  where  an  infant's  appointment  of  an  agent  is 
not  void,  but  voidable.  —  Ante,  §  15. 

'  Patterson  v.  Lippiucott,  47  N.  J.  L.  457. 


234  AGENT   AND    TIIIKD    PAUTY. 

liable  on  the  contract  as  i)rinei])al/  except  that  he  is  not 
liable  where  his  jtrincipal  dies  without  his  knowledire.''^ 

The  connnoncst  case  of  a  fictitious  [UMuciijal  is  the  case  of 
a  j)rojected  corporation  whose  promoters  enter  into  contracts 
in  anticipation  of  its  formation,  and  sign  "  as  agents"  for  the 
(named)  corporation.  Obviously  there  is  no  ])rincipal,  as  no 
coi-poration  exists.  If  it  should  never  exist  there  could  be  no 
question  as  to  the  sole  liability  of  the  j)romoters.  But  how  if 
it  is  in  fact  incorporated  and  ''  ratifies  "  the  contract  of  the 
promoters  ?  There  can  be  no  real  ratification  in  such  a  case 
because  it  is  the  first  essential  of  ratification  that  the  princijjal 
should  be  an  existing  person  at  the  time  the  contract  was 
made."^  Accordingly  the  agent  remains  liable  unkss,  by 
agreement  among  the  three  parties,  the  corporation  after  it  is 
in  existence  should  be  sul)stitutcd  in  jilace  of  the  promoters.'^ 
This,  however,  amounts  to  the  dischai'ge  of  the  original  con- 
tract and  the  formation  of  a  new  one. 

Another  common  case  is  where  A  contracts  with  X  in 
behalf  of  an  unincorporated  club  or  association.  Here  there 
is  a  body  of  more  or  less  clearly  identified  ])ersons  who  might 
jointly  or  severally  be  responsible  princii)als,  as  individuals, 
but  no  legal  entity  composed  of  the  members  in  the  aggregate. 
There  is  not  even  a  partnership.'^  In  such  case  if  the  agent 
contracts  in  the  name  of  a  principal,  which  name  conveys 
the  idea  of  a  corporate  entity,  the  agent  is  clearly  liable.*^ 
Whether  the  members  of  the  club  are  also  liable  depends  uj)on 
whether  in  fact  they  authorized  A  to  make  the  contract. 
Such  authority  may  be  found  in  the  constitution  or  by-laws  of 

1  Kelner  v.  Baxter,  L.  R.  2  C.  P.  174;  IloUman  v.  Pulliii,  1  C.  &  E. 
254;  Patrick  v.  Bowman,  149  U.  S.  411;  Lewis  v.  Tilton,  64  Iowa,  220; 
cf.  Bartlett  v.  Tucker,  104  :Mass.  3o6. 

••^  Smout  V.  Ilbery,  10  M.  &  \V.  1 ;  Carriger  r.  Wliittingtoii,  26  Mo. 
311. 

8  Ante,  §  32.  But  see  Whitney  v.  Wyman,  101  U.  S.  392;  Oakes  v. 
Cattaraugus  Water  Co.,  143  X.  Y.  430. 

6  Flemyng  v.  Hector,  2  M.  &  W.  172;  Ash  v.  Guie,  97  Pa.  St.  493. 
«  Lewis  V.  Tilton,  64  Iowa,  220;  Blakely  v.  Bennecke,  59  Mo.  193; 
Comfurt  V.  Graham,  87  Iowa,  295. 


LIABILITY  IN   CONTRACT.  235 

the  club  to  which  the  members  have  assented/  or  in  the  vote 
of  a  meeting  at  which  the  members  were  present  and  in  the 
results  of  which  they  acquiesced.^  If  the  credit  was  extended 
to  the  agent  and  not  to  the  body  he  represents,  the  agent  is 
liable.^  But  if  the  credit  is  extended  to  the  club,  or  its 
members,  and  not  to  the  agent,  and  the  agent  was  authorized 
to  procure  such  credit,  then  the  club  or  its  members,  and  not 
the  agent,  will  be  liable.* 

§  186.     (IV)  Exclusive  credit  to  agent. 

"  The  seller  who  knows  who  the  principal  is,  and,  instead 
of  debiting  the  principal,  debits  the  agent,  is  considered, 
according  to  the  authorities  which  have  been  referred  to,^  as 
consenting  to  look  to  the  agent  only,  and  is  thereby  precluded 
from  looking  to  the  principal."  ^  An  agent  may  deal  so  as  to 
bind  himself  personally,  although  disclosing  his  ])rincipal ;  it 
is  always  a  question  of  the  intention  and  understanding  of 
the  parties.^  Where  in  a  sale  the  principal  is  known,  but  the 
personal  obligation  of  the  agent  alone  is  taken  for  the  pur- 
chase price,  it  is  presumed  that  credit  is  given  to  the  agent 
and  not  to  the  principal.^  In  cases  where  a  principal  is 
undisclosed,  the  third  party  has  an  election  between  the 
principal  and  the  agent.^  In  cases  where  the  principal  is 
disclosed,  the  matter  becomes  one  of  the  intention  of  the 
parties  at  the  time  of  the  making  of  the  contract.  It 
has  been  held  that  accepting  a  written  contract  in  the  name 
of   the   agent,  when  the   principal    is   known,  is   conclusive 

1  Flemyng  v.  Hector,  supra  ;  Todd  v.  Emly,  7  M.  &  W.  427. 

2  Willcox  V.  Arnold,  162  Mass.  577;  Heath  v.  Goslin,  80  Mo.  310. 

3  Eichbaum  v.  Irons,  6  Watts  &  Serg.  (Pa.)  G7;  ante,  §  20. 

*  Pain  r.  Sample,  158  Pa.  St.  428;  Bennett  v.  Lathrop,  71  Conn.  61-3. 

5  Paterson  v.  Gandasequi,  15  East,  62 ;  Addison  v.  Gandasequi, 
4  Taunt.  574;  Maanss  v.  Henderson,  1  East,  335. 

«  Thomson  v.  Davenport,  9  B.  &  C.  78,  89. 

■^  AVorthington  v.  Cowles,  112  Mass.  30;  Kelly  v.  Thuey,  102  Mo.  522; 
Williamson  i\  Barton,  7  H.  &  N.  899. 

8  Merrill  );.  Witherby,  120  Ala.  418:  Paige  v.  Stone,  10  Mete.  (Mass.) 
160.     But  see  Atlas  S.  S.  Co.  r.  Colombian  Land  Co.,  102  Fed.  Rep.  358. 

9  Ante,  §  126;  post,  §§  196,  197. 


236  AGENT    AND   THIRD    TAUTY. 

evidence  of  an  intent  to  look  to  the  agent  alouc  ;  ^  but  this  is 
doubtful. 2 

If  the  ostensible  agent  is  really  the  principal,  and  is  in  fact 
acting  upon  his  own  behalf,  he  is,  of  course,  liable  upon  the 
contract.^ 

§  187.   (V)  Foreign  principal. 

Where  the  agent  contracts  in  behalf  of  a  foreign  ])rincipal, 
that  is,  one  residing  out  of  the  jurisdiction,  it  is  the  rule  of  the 
English  law  that  the  agent  is  presumed  to  pledge  his  own 
credit,  and  that  the  third  party  does  not  rely  upon  the  credit 
of  the  ))rincipal,  but  exclusively  upon  the  credit  of  the  agent, 
although  the  contract  discloses  the  princij)al  and  the  fact  of 
the  agency.*  But  there  is  nothing  to  prevent  one  foreign 
merchant  from  contracting  with  another  througli  the  in- 
strumentality of  an  agent,  and  if  he  docs  so,  he  is,  of  course, 
bound  by  his  contract.^  And  the  agent  may  contract  ex- 
clusively for  the  foreign  principal  without  recourse  to  himself.^ 

In  the  United  States,  this  rule  as  to  foreign  principals  has 
been  generally  disapproved.  It  is  held  that  there  is  no  pre- 
sumption that  one  dealing  with  an  agent  of  a  foreign  principal 
gives  exclusive  credit  to  the  agent ;  that  it  is  in  each  case  a 
question  of  fact ;  and  that  the  fact  that  the  principal  resides 
in  a  foreign  jurisdiction  has  merely  an  evidential  force.'  In 
reaching  this  conclusion  the  courts   have  probably  been  in- 

1  Chandler  v.  Coe,  54  N.  H.  561. 

2  Ante,  §  126;  post,  §  107. 

B  Carr  v.  Jackson,  21  L.  J.  Ex.  137;  Isham  v.  Burgett,  157  Mass.  .546; 
cf.  Heffron  r.  Pollard,  73  Tex.  96. 

"  Leake  on  Cont.  (3d  ed.)  p.  417;  Pollock  on  Cont.  (6th  ed.)  p.  95; 
Hutton  r.  Bulloch,  L.  R.  9  Q.  B.  572;  Die  Elbinger  Actien-GeselLschaft  v. 
Claye,  L.  R  8  Q.  B.  313;  Reynolds  r.  Peapes,  6  T.  L.  R.  49.  But  in 
a  recent  I-^nglish  work  on  Agency  it  is  said  that,  "it  now  seems  that  there 
is  no  presumption  either  way,  and  that  it  is  always  a  question  as  to  what 
was  the  intention  of  the  parties."  —  AVright  on  Agency,  pp.  296,  297. 

6  Flinn  &  Co.  v.  Iloyle,  63  L.  J.  Q.  B.  1  (1894). 

«  Green  >-.  Kopke,  18  C.  B.  549. 

^  Kirkpatrick  v.  Stainer,  22  Wend.  (N.  Y.)  244;  Oelricks  v.  Ford,  23 
How.  (U.  S.)  49,  64,  65;  Bray  v.  Kettfll,  1  Allen  (Mass.),  80;  Barry  v. 
Page,  10  Gray  (Ma.ss.),  398  ;  Kaulback  v.  Churcliill,  59  N.  II.  296. 


LIABILITY   IN   CONTRACT.  237 

fiuenced  by  the  consideration  that  the  States  of  the  Union 
are,  as  to  the  law  merchant,  foreign  to  each  other,  and  that 
the  English  rule  would  work  serious  inconvenience  to  trade 
jimong  the  States. ^  Even  if  the  rule  were  admitted  as  to 
principals  resident  in  foreign  countries  generally,  it  would 
jirobablv  be  denied  as  to  those  resident  in  two  different  States 
of  the  Union. 2 

§  188.     (VI)  Contract  under  seaL 

Where  an  agent  makes  a  contract  under  seal  in  his  own 
name  (the  seal  not  being  merely  superfluous),  the  agent  alone 
is  liable  on  the  contract  whether  his  principal  be  known  or 
unknown.  It  is  a  technical  rule  of  the  common  law  that 
only  those  parties  can  be  charged  upon  a  sealed  instrument 
in  whose  names  it  is  made,  signed,  and  sealed.^  Nor  is  there 
any  remedy  against  the  principal  even  in  equity.*  But  if 
the  seal  is  superfluous  it  may  be  disregarded.^  If  the  instru- 
ment be  unsealed  the  principal  may  be  held,  even  though  it 
be  on  a  contract  required  by  the  Statute  of  Frauds  to  be  in 
writing.^ 

The  recitals,  covenants,  testimonium  clause,  signature,  and 
seal  must  be  examined  in  order  to  determine  whether  the 
instrument  is  the  deed  of  the  principal  or  of  the  agent.  The 
instrument,  in  order  to  bind  the  principal,  should  be  in  his 
name,  under  his  seal,  and  should  purport  to  be  his  deed  ;  the 
form  of  the  signature  may  be  "  P  by  A  "  or  "  A  for  P "  or 
"  for  P,  A."  ^     If   the  agent  use  apt  words  to  charge  him- 

1  See  Wharton  on  Agency,  §§  791-793. 

2  Vawter  v.  Baker,  23  Ind.  63;  Barry  v.  Fage,  supra  ;  Barham  v.  Bell, 
112  N.  C.  131. 

8  Cass  V.  Rudele,  2  Vern.  280;  Appleton  v.  Biiiks,  5  East,  148;  Han- 
cock V.  Hodgson,  4  Bing.  269 ;  Briggs  v.  Partridge,  64  N.  Y.  357 ;  Kier- 
Bted  V.  R.  R^  Co.,  69  N.  Y.  343 ;  Sanders  v.  Partridge,  108  Mass.  556. 

4  Borcherling  v.  Katz,  37  N.  J.  Eq.  150. 

5  Lancaster  v.  Knickerbocker  Ice  Co.,  153  Pa.  St.  427;  Stowell  v.  El- 
dred,  39  Wis.  614. 

6  Beckham  v.  Drake,  9  M.  &  W.  79,  91;  Briggs  v.  Partridge,  supra; 
Byington  V.  Simpson,  134  Mass.  169. 

T  Wilks  V.  Back,  2  East,  142;  Mussey  v.  Scott,  7  Cush.  (Mass.)  215; 


238  AGENT  AND  THIRD  TARTY. 

self  personally,  he  will  l)e  Ijoiind  and  not  his  principal.^  Thus 
a  deed  reciting  that  it  is  executed  in  accordance  with  the 
vote  of  a  corporation,  but  concluding,  "  I  hereunto  set  my 
hand  and  seal,"  followed  by  the  agent's  name  and  a  seal, 
is  the  deed  of  the  agent  and  not  of  the  principal.^  JJut  where 
a  deed  recites  that  it  is  made  by  the  "  P  Co.  by  A,  agent," 
and  concludes,  "the  parties  have  hereunto  set  their  hands 
and  seals,"  and  is  signed  "A,  agent  [seal],"  the  P  Co,  is 
bound  by  the  instrument,  since  it  is  held  that  the  name  of  the 
principal  need  not  necessarily  appear  in  the  signature,  pro- 
vided it  appear  in  the  recitals,  and  the  testimonium  clause 
describes  the  signature  and  seal  as  those  of  the  principal.^ 
On  the  other  hand  the  name  of  the  agent  need  not  appear  in 
the  signature.* 

In  the  case  of  public  agents,  the  rule  is  that  the  agent  is 
not  bound  by  a  sealed  instrument,  unless  the  intent  to  make 
himself  personally  liable  is  clearly  disclosed,  since  it  cannot 
lightly  be  presumed  that  individuals  have  assumed  pul)lic 
burdens.^ 

§  189.     (VII)     Negotiable  instruments.  —  General  rules. 

Only  the  parties  who  are  named  or  described  in  a  negotiable 
instrument  can  sue  or  be  sued  upon  it.  For  our  present  pur- 
pose we  may  state  the  rule  to  be  that  only  the  person  in  whose 

Varnura  v.  Evans,  2  Mc:\Iull,  (S.  C),  409 ;  Whitehead  /•.  Reddick,  12  Ired. 
(N.  C.)  95.  But  if  there  be  no  recitals  showing  the  principal,  it  has  been 
held  that  a  bond  signed  "  A  for  F,"  is  the  bond  of  A.  Bryson  v.  Lucas, 
84  N.  C.  680. 

1  Taft  V.  Brewster,  9  Johns.  (N.  Y.)  334 ;  Dayton  v.  Warne,  43  N.  J. 
L.  6.30. 

2  Stinclifield  r.  Little,  1  Me.  231. 

8  Bradstreet  r.  Baker,  14  11.  I.  546.  See  also  IMcDaniel  v.  Flower 
Brook  Mfg.,  Co.,  22  Vt.  274;  Martin  r.  Almond,  25  Mo.  313;  City  of 
Kansas  v.  Hannibal,  &c.  11.,  77  Mo.  180;  Whitford  v.  Laidler,  94  N.  Y. 
145. 

*  Devinney  v.  Eeynolds,  1  W.  &  S.  (Pa.)  328:  Forsyth  r.  Day,  41  Me. 
382  ;  Berkey  v.  Judd,  22  INIinn.  287.  Contra,  Wood  i'.  Goodridge,  6  Cush. 
(Mass.)  117. 

6  Hodgson  V.  Dexter,  1  Cranch  (U.  S.),345;  Knight  v.  Clark,  48  N. 
J.  L.  22 ;  post,  §  203. 


LIABILITY    IN   CONTRACT.  239 

name  a  negotiable  instrument  is  executed  is  liable  upon  it 
and  that  parol  evidence  is  inadmissible  to  prove  that  one  who 
executes  a  negotiable  instrument  in  his  own  name  did  so  in 
behalf  of  an  undisclosed  principal,  or  of  a  principal  disclosed 
but  unnamed  in  the  instrument. ^ 

We  have  already  seen  that  in  the  case  of  simple  contracts 
generally,  parol  evidence  is  admissible  to  show  that  an  instru- 
ment signed  by  A.  B.  was  in  fact  signed  by  him  in  behalf  of 
P.  Q.,  and  that  thereupon  P.  Q.  may  be  held,  though  A.  B. 
will  not  be  discharged.^  But  in  the  case  of  sealed  instru- 
ments and  negotiable  instruments  the  rule  is  otherwise;  — 
the  first  because  of  the  technical  rules  of  the  common  law 
governing  sealed  instruments ;  the  second  because  of  the 
technical  rules  of  the  law  merchant  governing  negotiable 
instruments.  As  to  either  no  parol  evidence  is  admissible  to 
cliange  the  legal  effect  of  what  appears  upon  the  face  of  the 
instrument.^ 

To  this  general  rule  there  are  two  possible  exceptions,  so 
far  as  concerns  negotiable  instruments  :  first,  it  is  sometimes 
held  that  where  there  is  any  indication  by  words  of  descrip- 
tion or  otherwise,  that  the  person  signing  the  paper  signed  as 
agent  for  another,  parol  evidence  may  be  admitted  in  an  ac- 
tion between  the  original  parties,  or  those  who  took  the  paper 
with  full  knowledge  of  the  circumstances  attending  its  exe- 
cution, in  order  to  show  the  actual  understanding  and  intent 
of  such  original  parties ;  second,  it  is  held  that  where  there 
is  a  serious  ambiguity  on  the  face  of  the  paper,  parol  evi- 
dence may  be  introduced  as  between  any  party  and  a  bona 
fide  holder  for  value  in  order  to  explain  or  remove  such 
ambiguity. 

The  first  exception  is  not  universally  admitted.  Some  juris- 
dictions adhere  to  tlie  strict  technical  rule  that  parol  evidenoe 

1  Leadbitter  v.  Farrow,  o  M.  &  S.  345 ;  Price  v.  Taylor,  5  11.  &  N. 
540;  Button  v.  INIarsh,  L.  R.  6  Q.  B.  361;  Cragin  v.  Lovell,  109  U.  S. 
194;  Barlow  v.  Congregational  Society,  8  Allen  (Mass.),  400;  Sturdivant 
V.  Hull,  59  Me.  172;  Rendell  v.  Harriman,  75  Me.  497;  Casco  N.  B.  v. 
Clark,  139  N.  Y.  307.     See  ante,  §  128. 

2  Ante,  §  123.     See  Leake  on  Cont.  (6th  ed.)  pp.  441-442. 
8  Briggs  V.  Partridge,  64  N.  Y.  357. 


240  AGENT    AND   TIIIUD   PARTY. 

is  inadmissible  to  introduce  into  a  neQ:otiable  instrument  any 
person  wiio  is  not  by  the  terms  thereof  a  party  to  the  in- 
strument, and  that  the  ambiguity  or  doubt  raised  by  sign- 
ing ''  A,  agent,"  or  "  A,  agent  of  P,"  or  "  A,  treas.,"  ^  or  "  A, 
treas.  of  P.  Co.,"  is  not  sufficient  to  let  in  parol  evidence  even 
as  between  the  original  parties  to  the  paper  or  those  who 
stand  in  their  shoes.^  On  the  other  hand,  there  is  a  strong 
authority  for  the  exception  to  be  found  in  the  lioldiugs  of 
other  jurisdictions.^ 

The  second  exception  is  also  involved  in  considerable  con- 
flict and  confusion.  The  face  of  the  negotiable  instrument 
may  disclose  an  ambiguity  or  doubt  as  to  who  is  the  real 
maker,  and  in  such  a  case  it  is  said  that  parol  evidence  is 
admissible  to  remove  the  ambiguity.  At  one  extreme  are 
cases  where  clearly  the  instrument  is  upon  its  face  the  obli- 
gation of  the  principal.  At  the  other  extreme  are  cases  where 
clearly  the  obligation  is  that  of  the  agent.  Between  these 
extremes,  and  shading  into  them  by  imperceptible  degrees, 
are  cases  of  ambiguity  or  doubt.  Some  of  these  ambiguous 
cases  are  resolved  by  the  court  as  cases  for  interj)retation 
npon  an  examination  of  the  instrument.  Some  are  resolved 
by  the  aid  of  parol  evidence  introduced  to  remove  that  am- 
biguity. Almost  hopeless  confusion  arises  from  the  fact  that 
practically  the  same  instrument  will  be  resolved  by  one  court 
by  interpretation  as  the  obligation  of  the  principal,  by  another 
as  the  obligation  of  the  agent,  and  by  a  third  in  accordance 
with  the  fact  as  established  by  parol  evidence.^ 

1  Tucker  Mfg.  Co.  v.  Fuirbauks,  98  Mass.  101 ;  Williams  v.  Second  N. 
B.,  83  Iiid.  237  ;  Collins  v.  Buckeye  State  Ins.  Co.,  17  Oh.  St  215. 

2  Metcalf  V.  Williams,  104  u'  S.  93;  Case  Mfg.  Co.  v.  Soxman,  138 
U.  S.  431 ;  Brockway  v.  Allen,  17  Wend.  (N.  Y.)  40;  Kean  v.  Davis,  21 
N.  J.  L.  683  ;  Keidan  v.  Winegar,  95  Mich.  433 ;  Kline  v.  Bank,  50 
Kaiis.  91  ;  Janes  v.  Citizens'  Bank,  9  Okla.  546,  and  cases  there  discussed, 
overruling  Keokuk  Falls  Imp.  Co.  v.  Kingsland,  &c.  Co.,  5  Okla.  32. 

8  Compare,  for  example,  Carpenter  v.  Farnsworth,  106  Mass.  561 ; 
Casco  National  Bank  v.  Clark,  139  N.  Y.  307  ;  and  Fraiikland  r.  John- 
son, 147  111.  520.  And  compare  Liebscher  v.  Kraus,  74  Wis.  387;  Mat- 
thews V.  Dubuque  Mattress  Co.,  87  Iowa,  246;  and  Reeve  v.  First  Matioual 
Bank,  54  N.  J.  L.  208. 


LIABILITY    IN    CONTRACT.  241 

Under  such  circumstances  it  is  impossible  to  formulate 
settled  rules  as  to  the  interpretation  of  these  intermediate 
cases.  Perhaps  the  most  useful  course  will  be  to  take  up 
the  general  classes  of  cases  and  ascertain  the  trend  of  judi- 
cial oi)inion.  The  cases  for  construction  fall  first  into  three 
classes :  (1)  where  the  construction  rests  upon  the  signature 
alone;  (2)  where  the  construction  rests  upon  the  signature 
aided  by  recitals  in  the  body  of  the  instrument ;  (3)  where 
the  construction  rests  upon  the  signature  aided  by  marginal 
recitals,  memoranda,  or  headings.  These  will  be  considered 
in  the  order  named. 

The  parties  upon  a  negotiable  instrument  may  be  the  maker 
of  a  promissory  note  or  the  drawer  of  a  bill  of  exchange,  or 
the  acceptor  of  a  bill  of  exchange,  or  the  indorser  of  a  bill  or 
note.     And  fii'st  of  the  maker  or  drawer. 

§  190.     Same.  —  (1)  Construction  from  signature  alone. 

1.  The  signature  written  by  the  agent  as  maker  or  drawer 
may  be  unequivocally  that  of  the  principal,  and  the  sole  in- 
quiry will  be  as  to  the  authority  of  the  agent  to  sign.  The 
following  are  such  signatures.  (1)  P.  Q. ;  (2)  P.  Q.,  by  his 
agent  A.  B.,  or  by  A.  B.,  agent,  —  or  by  A.  B. ;  (3)  A.  B., 
agent  for  P.  Q. ;  or  A.  B.  for  P.  Q. ;  (4)  Pro.  P.  Q.— 
A.  B.i 

2.  The  signature  written  by  the  agent  as  maker  or  drawer 
may  be  unequivocally  the  signature  of  the  agent  alone,  and 
the  agent  alone  will  be  bound.  The  following  are  such 
signatures  :  (1)  A.  B. ;  (2)  A.  B.,  agent ;  (3)  A.  B.,  agent 
of  P.  Q.;2  (4)  A.   B.,  president,  or  treasurer,  etc. ;  ^  (5)  A. 

1  1  Daniel  on  Neg.  Inst.  §  298  ;  Long  v.  Colbnrn,  11  ]\Iass.  97;  Ballou 
V.  Talbot,  16  Mass.  461;  cf.  Tannatt  v.  Rocky  Mt.  Nat.  Bk.,  1  Colo. 
278;  De  Witt  v.  Walton,  9  N.  Y.  571. 

2  Sparks  v.  Dispatch  Trans.  Co.,  104  Mo.  531;  Pentz  v.  Stanton,  10 
Wend.  (N.  Y.)  271;  Williams  v.  Robbins,  16  Gray  (Mass.),  77;  Bank  v. 
Cook,  38  Oh.  St.  442;  Tarvcr  v.  Garlington,  27  S.  C.  107;  Cragin  v. 
Lovell,  109  U.  S.  194. 

3  Davis  V.  England,  141  Mass.  587;  Hobson  v.  Hassett,  76  Cal.  203 ; 
cf.  Metcalf  v.  Williams,  104  U.  S.  93,  which  was  a  case  between  original 
parties,  and  Devendorf  v.  West  Virginia,  &c.  Co.,  17  W.  Va.  135,  which 

16 


242  AGENT    AND    THIKD    TAKTY. 

B.,  president,  or  treasurer,  etc.,  of  the  P.  Q,  Co.  ;^   (G)  A.  B., 
trustee.^ 

It  has  been  thought  that  tlie  signature  "  A.  B.,  cashier," 
stands  upon  a  different  footing,  but  this  is  questionable.^  It 
has  also  been  hckl  that  there  is  a  distinction  between  suits 
brought  by  a  party  to  the  instrument,  or  one  who  stands  in 
his  shoes,  and  suits  by  a  bona  fide  holder  for  value. ^ 

3.  The  signature  written  by  the  agent  as  maker  or  drawer 
mav  be  the  signature  of  his  principal  followed  by  his  own 
signature  with  the  descriptive  words,  "  agent,"  "president," 
"treasurer,"  etc.,  added,  as,  for  example,  "The  P.  Q.  Co., 
A.  B.,  President."  In  such  a  case  there  are  three  holdings  on 
practically  the  same  state  of  facts :  (a)  that  it  is  the  signa- 
ture of  the  principal  alone  ;^  (h)  that  it  is  the  signature  of 
both  the  principal  and  agent ;°  {e)  that  it  is  an  ambiguous 
signature  and  parol  evidence  is  admissible  to  explain  it.^ 

Two  other  auxiliary  holdings  may  be  noted.  First,  the  seal 
of  the  corporation  is  to  be  given  the  same  effect  as  the  written 
name  of  the  corporation.^  Second,  in  a  jurisdiction  where 
parol  evidence  would  not  be  admitted  to  discharge  the  agent, 
the  instrument  may  be  reformed  in  equity  to  work  his  dis- 
charge, in  case  of  proof  of  mutual  mistake  as  to  the  form  of 
signature  necessary.^ 

4.  The  principal  may  adoj)t  the  name  of  the  agent  as  his 

seems  to  proceed  upon  tlie  theory  that  the  principal  had  "  adopted  "  tlie 
agent's  name. 

1  Sturdivant  v.  Hull,  59  Me.  172;  Rendell  v.  Ilarrinian,  75  Me.  497; 
Tucker  Mfg.  Co.  r.  Fairbanks,  98  Mass.  101  ;  Burlinganie  v.  Brewster, 
79  111.  515;'  I'.ank  v.  Cook,  ;58  (3h.  St.  442. 

2  Price  I'.  Taylor,  5  H.  &  N.  540. 
»  See  pout,  §  194. 

4  Anie,  §  189. 

6  Lieb.scher  v.  Kraus,  74  AVis.  387;  Reeve  v.  First  Nat.  Bk.,  54  N.J. 
L  208;  Grafton  N.  B.  v.  Wing,  172  Mass.  513. 

«  Matthews  v.  Dubuque  INIattress  Co.,  87  Iowa,  246. 

■^  Bean  v.  Pioneer  Mining  Co.,  CG  Cal.  451 ;  Case  Mfg.  Co.  v.  Soxnian, 
138  U.  S.  431. 

8  Means  v.  Swormstedt,  32  Ind.  87;  Scanlan  v.  Keith,  102  111.  634  j 
Miller  v.  Roach,  1.50  Mass.  140. 

*  hee  V.  Percival,  85  Iowa,  639. 


LIABILITY   IN   CONTRACT.  243 

trading  name,  and  in  such  cases  the  signature  A.  B,  is  the 
signature  of  P.  Q.  Thus  a  corporation  may  trade  under  a 
partnership  name,^  or  the  name  of  an  officer,^  or  a  partner- 
ship under  the  name  of  an  individual.^  This  presents  one 
case,  therefore,  where  parol  proof  may  always  be  given  to 
charge  a  person  whose  (true)  name  does  not  appear  upon  the 
negotiable  instrument ;  and,  as  tliis  exception  exists,  it  seems 
it  would  be  improper  to  sustain  a  demurrer  to  a  complaint 
alleging  the  agency,  since  "  non  constat  but  the  plaintiff  may 
be  able  to  bring  his  case  under  that  exception."  *  At  common 
law  a  husband  may  adopt  as  his  own  the  indorsement  made 
by  his  wife  in  her  name  upon  a  bill  or  note  payable  to  her 
order,  and  in  such  a  case  her  signature  is  his  signature.^  It 
has  been  suggested  that  a  bank  adopts  the  name  of  its  cashier 
as  its  trading  name  in  the  drawing  and  indorsing  of  negotiable 
paper,  but  the  cases  are  easily  explainable  without  resorting 
to  this  assumption.^ 

§  191.     Same.  —  (2)  Construction  from  signature  aided  by  recitals 
in  the  instrument. 

6.  The  body  of  the  instrument  may  contain  recitals  as  to 
the  identity  of  the  principal  or  the  fact  of  the  agency  which, 
taken  with  the  signature  of  the  maker  or  drawer,  will  either, — • 
(a)  render  the  obligation  clearly  that  of  the  principal,  or  (5) 
render  the  instrument  so  ambiguous  as  to  raise  a  case  for  in- 
terpretation or  construction  by  the  court,  or  (^)  render  the 
instrument  so  ambiguous  as  to  let  in  parol  evidence  to  explain 
it.  It  is  in  the  treatment  of  this  class  of  instruments  that  the 
greatest  diversity  of  views  prevails.  A  few  illustrations  are 
given  to  show  the  nature  of  the  problem. 

(a)  Tiie  following  has  been  said  to  be  clearly  the  obliga- 

^  Melledge  v.  Boston  Iron  Co.,  .5  Cush.  (Mass.)  158. 
2  Devendorf  v.  West  Virginia,  &c.  Co.,  17  W.  Va.  135. 
8  Rumsey  v.  Briggs,  l;39  N.  Y.   323;    Bank   v.  Mouteath,   1   Denio 
(N.Y.),  402. 

4  Tarver  v.  Garlington,  27  S.  C.  107. 

5  Hancock  Bank  v.  Joy,  41  Me.  568. 

®  Poxt,  §  194.  Cf.  dictum  in  Robinson  v.  Kanawha  Valley  bank,  44 
Oh.  St.  441,  448. 


244  AGENT    AN  I)   TIIIIUi    PARTY. 

tion  of  tlic  principal :  "  We,  as  trustees  (or  \vc,  trustees)  of 
the  P.  Q.  Co.,  promise,"  etc.,  (signed)  "A.  B.,  C.  D.,  trustees 
of  the  P.  Q.  Co."  ^  But  the  same  recital  with  the  signature 
"  A.  B.,  C.  D.,  trustees,"  was  held  to  be  the  individual  obliga- 
tion of  the  signers.^  This  is  a  very  refined  distinction,  and  of 
doubtful  utility.  In  another  case  it  was  held  that  a  like  re- 
cital in  an  instrument  signed  "A.  B.,  C.  D.,"  with  no  official 
description  was  clearly  the  obligation  of  the  principal,  but  this 
construction  was,  perhaps,  aided  by  statute.^  (b)  Cases  fall- 
ing under  this  head  are  only  a  phase  of  those  just  con- 
sidered. But  that  the  obligation  is  not  clearly  that  of  either 
the  j)rincipal  or  the  agent  is  shown  by  the  fact  that  one  court 
will  hold  practically  the  same  instrument  to  bind  the  princi- 
pal, while  another  court  will  hold  it  to  bind  the  agent,  and  a 
third  to  be  so  ambiguous  as  to  admit  parol  evidence.''  Where  a 
note  reads  "  we  promise  to  pay  for  the  P.  Co.,"  and  is  signed 
"  A.  B.,  C.  D.,  trustees,"  it  is  held  to  bo  the  obligation  of  the 
signers  ])ersonally.^  (c)  The  following  have  been  said  to  be  so 
ambiguous  as  to  let  in  parol  evidence  :  "The  P.  Q.  Co.  prom- 
ises," etc.,  (signed)  "A.  B.,  Gen.  Supt.;""  "The  directors  of 
the  P.  Q.  Co.  promise,"  etc.,  (signed)  "  A.  B.,  C.  D.,"  with  no 
additional  words  indicating  agency;'^  "  Pay  to  the  order  of 
the  P.'Q.  Co.,"  etc.,  (signed)  "  A.  B.,  President  P.  Q.  Co."  ^ 

§  192.     Same.  —  (3)  Construction    from  signature    aided  by  mar- 
ginal heading  or  memoranda. 

6.  The  margin  of  the  instrument  may  contain  headings  or 
memoranda  disclosing  the  identity  of  the  principal,  or  the  fact 

1  Barlow  v.  Congregational  Society,  8  Allen  (Mass.),  460;  Blanchard 
V.  Kaull,  44  Cal.  440;  ^"ew  Market  Savings  Bank  v.  Gillet,  100  111.  2.54. 

■^  Powers  ('.  Briggs,  79  111.  493.  Contrn,  Barlow  v.  Congregational 
Society,  supra;  Aggs  v.  Nicholson,  1  H.  &  N.  10.5. 

*  Simpson  v.  Garland,  12  Me.  40. 

*  Compare,  for  example.  Simpson  v.  (Jarland,  supra,  with  Pack  i'. 
White,  78  Ky.  243,  and  McKensey  v.  Edwards,  88  Ky.  272. 

6  Allan  V.  Miller,  22  L.  T.  R.  825.     See  also  Bradlee  v.  Boston  Glass 
Manufactory,  16  Pick.  (Mass.)  347. 
0  Frankland  v.  Johnson,  147  111.  520. 
■'  IMcKensey  v.  Edwards,  88  Ky.  272. 
8  Kean  v,  Davis,  21  N.  J.  L.  683. 


A)*- 


LIABILITY   IN    CONTRACT.  245 

of  the  agency,  which,  taken  with  the  signature  of  the  maker 
or  drawer,  will  raise  a  case  for  interpretation.  But  there  is 
the  widest  divergence  in  the  decisions  as  to  the  effect  of  the 
interpretation. 

(a)  Headings.  It  has  been  held  that  negotiable  instruments 
headed  with  the  name  and,  possibly,  address  of  the  principal 
and  signed  "  A.  B.,  agent,"  or  "  president,"  "  secretary,"  etc., 
is  the  obligation  of  the  principal  whose  name  is  thus  disclosed 
upon  the  instrument.^  But  other  cases  are  to  the  contrary .2 
And  where  one  agent  of  the  principal  so  named  draws  upon 
another  signing  "A.  B.,  agent,"  and  the  latter  accepts,  signing 
"  C.  D.,  agent,"  the  acceptor  is  personally  bound  since  the 
force  of  the  heading  is  exhausted  in  qualifying  the  liability  of 
the  drawer.^  In  the  leading  case  of  Mechanics'  Bank  v.  Bank 
of  Columbia,*  the  instrument  was  headed  "  Mechanics'  Bank 
of  Alexandria"  and  signed  "  Wm.  Paton,  Jr.,"  with  no  words 
indicative  of  agency.  The  court  held  the  instrument  ambigu- 
ous and  admitted  parol  evidence  to  explain  it.  Had  the  signa- 
ture been  followed  by  the  word  "cashier,"  it  would  have  been 
held  unequivocally  the  obligation  of  the  bank.^  This  case  is 
the  origin  of  a  vague  doctrine  that  the  signature  of  a  cashier 
stands  upon  a  different  footing  from  that  of  other  agents,  but 
clearly  it  is  to  be  explained  in  accordance  with  the  rule  gov- 
erning an  ambiguity  appearing  on  the  face  of  the  instru- 
ment. 

(5)  Marginal  memoranda.  It  has  been  held  that  negoti- 
able instruments  with  the  name  of  the  principal  across  the 
end,  and  signed  "A.  B.,  agent,"  or  "president,"  "treasurer," 
etc.,  are  the  obligations  of  the  principal  whose  name  is  thus 
disclosed  upon  the    instrument.^     But  the  contrary  decision 


1  Hitchcock  V.  Buchanan,  105  U.  S.  416;  Olcott  <;.  Tioga  R.  R.  Co., 
27  N.  Y.  5i6. 

2  Cf.  Casco  Xat.  Bk.  v.  Clark,  139  N.  Y.  305. 

3  Slawson  v.  Lonng,  5  Allen  (Mass.),  340. 

4  5  Wheat.  (U.  S.)  326. 

5  Mr.  Justice  Lamar  in  Falk  v.  Moebs,  127  U.  S.  597,  606. 

®  Carpenter  v.  Farnsworth,  106  Mass.  561;  Chipman  v.  Foster,  119 
Mass.  189, 


246  AGENT   AND   THIRD   PARTY. 

lias  been  reached  in  other  cases, ^  thougli  with   a  snsigestion 
that  the  i-esult  might  have  been  otherwise  had  the  action  been 
between  the  original  parties.^ 
§  193.     Same.  —  Acceptors  of  bills  of  exchange. 

The  above  illustrations  cover  mainly  the  cases  of  makers  of 
promissory  notes  and  drawers  of  bills  of  exchange,  as  to  whom, 
in  these  matters,  there  is  no  distinction.^  We  have  yet  to 
consider  the  cases  of  acceptors  of  bills  of  exchange  and  in- 
dorsers  of  bills  or  notes. 

A  bill  of  exeliange  is  drawn  upon  some  designated  person, 
known  as  the  drawee.  If  he  accepts  the  bill  he  is  bound  as 
acceptor,  and  the  mere  fact  that  he  adds  "  agent,"  or  "  presi- 
dent," "  treasurer,"  etc.,  after  his  signature  will  not  render 
his  unnamed  principal  liable.  The  following  will  illustrate 
the  phases  of  this  (piestion  : 

(1)  The  bill  may  be  drawn  on  "  A.  B."  and  accepted  by 
'•A.  B.;  "  or  drawn  on  "A.  B.,  agent,"  and  accepted  by  "A. 
B.,  agent;"  or  drawn  on  "A.  B.,  agent  of  P.  Q.,"  and  ac- 
cepted by  "  A.  B.,  agent  of  P.  Q."  In  the  first  two  cases  there 
is  general  agreement  that,  in  the  absence  of  recitals -or  other 
indications  of  the  identity  of  the  principal,  A.  B.  alone  is 
bound.*  In  the  third  case  there  is  disagreement,  one  case 
holding  the  obligation  clearly  that  of  the  agent/'  and  another 
holding  parol  evidence  admissible  to  explain  it.*^  But  there 
seems  to  be  no  more  reason  for  giving  the  term  "  agent  of 
P.  Q."  any  different  construction  here  than  when  added  to 
the  signature  of  a  maker  or  drawer. 

(2)  The  bill  may  be  drawn  on  "  A.  B."  and  accepted  by 
"P.  Q.  by  A.  B.,  agent."  Here  clearly  A.  B.  is  not  bound. 
But  neither  is  P.  Q.,  because  P.  Q.  is  not  the  drawee,  and 

1  Casco  Nat.  Bk.  r.  Clark,  1:39  N.  Y.  305;  First  X.  B.  v.  AVallis,  150 
N.  Y.  455. 

2  Ante,  §  ISO. 

8  Tucker  Mfg.  Co.  i\  Fairbanks,  OS  ^ilass.  101. 

*  Mare  v.  Charles,  5  El.  &  Bl.  978 ;  Slawson  v.  Loring,  5  Allen  (Mass.), 
340. 

6  ISIoss  V.  Livingston,  4  Coinst.  (4  N.  Y.)  20S. 

«  Shelton  v.  Darling,  2  Conn.  435 ;  Laflin,  &c.  Co.  v.  Sinsheimer,  48 
Md.  411. 


LIABILITY  IN   CONTRACT.  247 

only  the  drawee  can  accept.^  But  if  in  such  a  case  the  bill 
is  accepted  "  A.  B.  as  agent  of  P.  Q.,"  or  "  A.  B.  for  P.  Q.,"  it 
seems  that  the  agent  is  bound,  because  where  a  bill  is  drawn 
on  an  agent  personally,  and  he  accepts  it  in  his  own  name,  he 
is  liable,  even  though  he  indicates  that  he  is  signing  for  or  on 
behalf  of  a  princi[)al.^ 

(3)  The  bill  may  be  drawn  on  "  P.  Q."  and  accepted  by 
"  A.  B.,  agent."  Here  it  would  seem  that  only  P.  Q.  is  liable, 
for  as  only  the  drawee  can  accept,  it  is  clear  that  "A.  B., 
agent,"  is  to  be  read  "  A.  B.,  agent  for  the  drawee."  ^  In  any 
event  A.  B.  is  not  liable  because  the  bill  is  not  drawn  upon 
him,  and  only  the  drawee  can,  accept.* 

(4)  The  bill  may  be  drawn  on  "  A.  B.,  agent,"  etc.,  but 
may  bear  other  marks  indicating  that  A.  B.  is  the  agent  of 
the  drawer.  This  is  held  to  be  the  case  where  a  bill  is 
drawn  by  "The  P.  Q.  Co.,  by  C.  D.,  Pres't,"  upon  "A.  B., 
Treas.,"  with  a  direction  to  charge  to  the  account  of  the 
company.^  But  it  is  difficult  to  reconcile  the  cases  upon  this 
point.^ 

§  194.     Same.  —  Indorsers  of  bills  and  notes. 

In  the  case  of  indorsers  of  bills  and  notes  the  whole  doc- 
trine of  terms  descriptio  personce  seems  to  have  broken  down. 
The  indorsement  of  the  payee  or  subsequent  holder  is  neces- 
sary to  transfer  the  title  to  the  paper  ;  the  addition  of  the 
term  "  agent "  is  indicative  that  the  indorsement  is  in  a  repre- 
sentative capacity  for  that  purpose ;  and  the  courts  have  prac- 
tically arrived  at  the  conclusion  that  where  tlie  instrument  is 
payable  to  "  A.  B.,  agent,"  and  indorsed  "A.  B.,  agent,"  that 
it  may  be  shown  that  A.  B.  was  acting  as  agent  for  an  un- 
named principal:  for  example,  "A.  B.,  treasurer;""  "  A.  B., 

1  Walker  v.  Bank,  9  N.Y.  .582. 

2  Nicholls  V.  Diamond,  9  Ex.  154;  Jones  v.  Jackson,  22  L.  T.  R  828. 
8  Soughegan  Nat.  Bk.  v.  Boardman,  46  Minn.  293,  29G  (dictum). 

4  Okell  r.  Charles,  34  L.  T.  R.  822. 
^  Hager  v.  Rice,  4  Colo.  90. 

^  Robinson  v.  Kanawha  Valley  Bank,  44  Oh.  St.  441. 
■^  Babcock  I'.  Beman,  11  N.  Y.  200;  Soughegan  Nat.  Bk.  v.  Boardman, 
46  Minn.  293. 


248  AGENT   AND    THIRD    TAKTY. 

agent  of  tlie  P.  Q.  Co.;"^  "A.  B.,  cashier."  ^  And  some  cases 
have  gone  to  the  length  of  lioldnig  that  in  a  note  payable  to 
"A.  B.,  sec.  and  treas.,"  signed  ''  P.  Q.  Co.,  A.  B.,  sec.  and 
treas.,"  and  indorsed  "  A.  B.,  sec.  and  treas.,"  the  indorsement 
was  conclusively  that  of  the  P.  Q.  Co.^ 

The  conrts  have  not  always  distinguished  between  cases  in- 
volving the  liability  of  a  maker  or  drawer  or  acceptor,  and 
cases  involving  the  lial)ility  of  a  payee  indor.ser,  and  needless 
"anarchy"  has  resulted  from  the  confusion.*  The  distinction 
is,  however,  a  valid  one  and  is  supported  by  the  decisions. 
Indeed,  the  supposed  distinction  between  "A.  B.,  cashier,"  and 
"A.  B.,  agent,"  is  largely  if  not  wholly  explained  by  the  fact 
that  most  of  the  cases  holding  the  signature  "  A.  B.,  cashier," 
to  be  the  signature  of  the  bank  of  which  A.  B.  is  shown  to  be 
cashier,  are  cases  of  indorsement;^  where  this  was  not  the 
case  the  instrument  bore  the  name  of  the  bank  upon  the 
margin;^  or  it  was  a  case  in  which  the  bank  brought  suit 
upon  a  bill  or  note  in  which  "A.  B.,  cashier,"  was  named  as 
payee." 

§  195.     Same.  —  Summary. 

It  will  be  seen  that  the  vexed  question  is,  what  creates  an 
ambiguity  on  the  face  of  an  instrument?  In  their  desire 
to  render  negotiable  instruments  certain,  and  to  avoid  deciding 
that  an  ambiguity  exists,  the  courts  have  reached  exactly 
opposite   conclusions   as   to   the    legal    effect   of    practically 

1  Vater  v.  Lewis,  36  Ind.  288;  Nichols  v.  Frothinghain,  45  Ue.  220. 

2  First  Nat.  Bk.  ;;.  Hall.  U  N.  Y.  395. 

3  Falk  V.  Moebs,  127  U.  S.  597. 

4  See  Falk  v.  Moebs,  127  U.  S.  507,  60G.  See  Grafton  N.  B.  v.  Wing, 
172  Ma.ss.  513. 

5  Bank  of  Genesee  v.  Patchin,  13  N.  Y.  309,  8.  c.  19  N.  Y.  312;  Bank 
of  New  York  v.  Bank  of  Ohio,  29  N.  Y.  619 ;  Folger  v.  Chase,  18  Pick. 
(Mass.)  63;  Garland  v.  Dover,  19  Me.  441;  Houghton  v.  First  Nat.  Bk., 
26  Wis.  663;  Bank  of  the  State  v.  Wheeler,  21  Ind.  90  ;  Arnold  v.  Swen- 
8on,  (Tex.)  44  S.  W.  870. 

6  Mechanics'  Bank  v.  Bank  of  Columbia,  5  Wheat.  (U.  S.)  326;  ante, 
§  192. 

7  Baldwin  v.  Bank,  1  Wall.  (U.  S.)  234;  Nave  v.  First  Nat.  Bk.,  87 
Ind.  204 ;  ante,  §  135. 


LIABILITY   IN    CONTRACT.  249 

identical  instrnmcnts.  No  stronger  evidence  is  needed  to 
prove  that  such  an  instrument  is  ambiguous.  If  reasonable 
men  may  differ  as  to  the  meaning  of  an  instrument,  a  case 
of  ambiguity  is  raised  which  should  be  determined  by  the  aid 
of  extrinsic  evidence.  The  following  rules  seem  to  be  justified 
by  an  examination  and  comparison  of  the  cases :  — 

(1)  An  ambiguity  is  not  created  merely  by  words  descrip- 
tive of  agency  added  to  the  signature,  except  (a)  where  there 
are  two  signatures  and  the  one  with  the  descriptive  words 
follows  the  other,  and  (6)  in  cases  of  indorsement. 

(2)  An  ambiguity  may  be  created  by  recitals  or  marginal 
memoranda,  disclosing  the  name  of  the  principal,  which, 
if  read  with  the  signature  and  its  descriptive  words,  would 
leave  a  reasonable  doubt  as  to  which  party  is  intended  to  be 
charged. 

(3)  An  ambiguity  is  created  by  merely  descriptive  words 
following  an  indorsement. 

(4)  Parol  evidence  is  always  admissible  to  show  that  the 
principal  does  business  under  the  name  of  the  agent. 

3.    Where  both  Principal  and  Agent  are  hound. 

§  196.     (I)  Undisclosed  principal. 

Where  an  agent  contracts  in  his  own  name,  whether  by 
parol  or  in  writing  (other  than  sealed  or  negotiable  instru- 
ments), for  an  undisclosed  principal,  both  the  agent  and  the 
principal  are  liable,  and  the  third  party  may  elect  which  he 
will  hold.^  Even  W'here  a  negotiable  instrument  is  given  by 
the  agent  in  his  own  name,  the  payee  by  disregarding  the 
instrument  may  proceed  against  the  principal  upon  the  origi- 
nal consideration.'-^  But  a  pi'incipal  is  not  undisclosed  merely 
because  he  is  not  named  ;  if  the  third  person  knows  the  agent 
is  acting  for  a  particular  principal,  and  there  is  no  specific 
contract  binding  the  agent  personally,  the  sole  remedy  will  be 

1  Simon  v.  Motives,  3  Burr.  1921 ;  Royce  v.  Allen,  28  Vt.  234 ;  Arger^ 
singer  V.  Macnaughton,  114  N.  Y.  535;  Pierce  v.  Johnson,  34  Conn.  274. 
As  to  what  constitutes  an  election,  see  ante,  §  126. 

2  Pentz  V.  Stanton,  10  Wend.  (N.  Y.)  271. 


250  AGENT   AND   THIRD    PARTY. 

against  the  principal.^  It  is  not  enougli,  however,  to  exon- 
erate the  agent  that  the  third  person  discovers  the  existence 
and  identity  of  the  principal  before  the  contract  is  jjcrfornied 
if  the  princijjal  was  unknown  when  the  contract  was  niade.^ 
Of  course  the  third  person  might  then  make  an  election  to 
hold  the  principal,  but  the  evidence  of  such  election  must  be 
convincing.^ 

If  the  third  person  knows  that  the  agent  is  acting  for  some 
principal,  but  does  not  know  who  the  principal  is,  the  agent  is 
liable  as  well  as  the  principal,*  unless  he  contracts  in  such 
form  as  to  rebut  the  presumption  of  personal  liability.^  Even 
where  he  contracts  "  as  agent  for  my  principals,"  or  "  as  agent 
for  owners,"  it  may  be  shown  that  by  custom  the  agent  un- 
dertakes a  person  liability.^ 

§  197.  (II)  Simple  contract  so  executed  as  to  render  agent  liable. 
If  an  agent  contracts  personally  in  a  simple  written  con- 
tract, he  is  personally  liable  even  though  his  principal  is 
disclosed  and  may,  at  the  option  of  the  other  contracting 
party,  also  be  held  liable.  Whether  the  agent  has  contracted 
personally  depends  upon  the  intention  of  the  parties  as  dis- 
closed by  the  terms  of  the  contract  and  the  attendant  circum- 
stances. A  written  contract  may  be  that  of  the  principal 
alone,  that  of  the  agent  alone,  or  that  of  both  principal  and 
agent.  In  the  first  case  only  the  principal  is  bound  ;'''  in  tlie 
second  case  only  the  agent  is  bound  by  the  terms  of  the 
written  instrument,  but  parol  evidence  is  admissible  to  show 
that  the  principal  is  also  bound,  but  not  to  show  that  the 
agent  is  not  bound  ;  ^  in  the  third  case  both  are  bound  by  the 

1  Chase  v.  Debolt,  7  111.  371  ;  Boston,  &c.  R.  v.  Wliitcher,  1  Allen 
(Mass.),  497;  Johnson  v.  Armstrong,  83  Tex.  325. 

2  Forney  v.  Shipp,  4  Jones'  L.  (N.  C.)  527. 

^  Hutchinson  i'.  Wheeler,  3  Allen  (Mass.),  577. 

*  Ilobhouse  v.  Hamilton,  1  Hog.  401;  Cobb  v.  Knapp,  71  N.  Y.  348. 

6  Southwell  V.  Bovvditch,  1  C.  P.  D.  374. 

«  Hutchinson  v.  Tatham,  L.  R.  8  C.  P.  482;  Piko  r.  Oni,rlcy,  IS  Q.  B. 
D.  708;  Fleet  v.  Murton,  L.  R.  7  Q.  B.  126  ;  cf.  Waddell  v. '  Mordecai, 
3  Hill  (S.  C),  22. 

7  Ante,  §  182.  8  ^^te,  §  123. 


LIABILITY   IN    CONTRACT.  251 

very  terms  of  the  instrument,^  but  only  according  to  the 
terms. 2 

The  rule  as  concerns  parol  evidence  is  that  it  may  be  intro- 
duced to  fix  liability  upon  an  unnamed  principal,  but  not  to 
exonerate  an  agent  who  has  made  himself  liable  by  the  terms 
of  tlie  contract.  This  rests  upon  the  consideration  that  such 
evidence,  introduced  for  the  first  purpose,  does  not  contradict 
the  written  agreement,  but  merely  shows  that  it  also  binds 
another,  whereas,  if  offered  for  the  second  purpose,  it  does  con- 
tradict the  written  agreement  by  seeking  to  establish  that  the 
agreement  does  not  bind  liim  whom  it  purports  to  bind.^ 

"  A  principal  may  be  charged  upon  a  written  parol  execu- 
tory contract  entered  into  by  an  agent  in  his  own  name, 
within  his  authority,  although  the  name  of  the  principal  does 
not  appear  in  the  instrument,  and  was  not  disclosed,  and  the 
party  dealing  with  the  agent  supposed  that  he  was  acting 
for  himself,  and  this  doctrine  obtains  as  well  in  respect  to 
contracts  which  are  required  to  be  in  writing,  as  to  tliose 
where  a  writing  is  not  essential  to  their  validity.  It  is,  doubt- 
less, somewhat  difficult  to  reconcile  the  doctrine  here  stated 
with  the  rule  that  parol  evidence  is  inadmissible  to  change,  en- 
large, or  vary  a  written  contract,  and  the  argument  upon  which 
it  is  supported  savors  of  subtlety  and  refinement.  .  .  .  What- 
ever ground  there  may  have  been  originally  to  question  the 
legal  soundness  of  the  doctrine  referred  to,  it  is  now  too 
firmly  establislied  to  be  overtlirown,  and  I  am  of  the  opinion 
that  the  practical  effect  of  the  rule  as  now  declared  is  to 
promote  justice  and  fair  dealing."  * 

"  But,  on  the  other  hand,  to  allow  evidence  to  be  given  that 
the  party  who  appears  on  the  face  of  the  instrument  to  be 
personally  a  contracting  party,  is  not  such,  would  be  to  allow 

1  Young  V.  Schuler,  11  Q.  B.  D.  651. 

2  Oglesby  v.  Yglesias,  El.  Bl.  &  El.  930. 

3  Jones  V.  Littledale,  6  A.  &  E.  486;  Higgins  v.  Senior,  8  M.  &  W. 
834;  Cream  City  Glass  Co.  v.  Friedlander,  84  Wis.  53;  Leake  on  Cent. 
(3ded.)  p.  413;  ante,  §  123. 

4  Briggs  V.  Partridge,  64  N.  Y.  357.  See  also  Waddill  v.  Sebree,  88 
Va.  1012. 


252  AGENT    AND   THIRD    PARTY. 

parol   evidence    to    contradict  the  written  agreement,  which 
cannot  be  done."  ^ 

The  construction  of  written  contracts  is  for  the  court,  where 
there  is  no  ambiguity  to  be  explained  by  parol  evidence.^  If 
the  contract  is  executed  by  the  agent  in  his  own  name,  and 
tliere  be  nothing  intlie  instrument  to  qualify  the  effect  of  sueli 
signature,  the  agent  is  held  to  have  contracted  personally.^ 
The  mere  addition  to  the  signature  of  the  term  "agent,"  or 
the  mere  description  of  himself  as  agent  in  the  body  of  the 
written  instrument,  creates  no  presumption  that  he  did  not  in- 
tend to  contract  personally.*  Terms  may  be  inserted,  however, 
negativing  the  idea  of  personal  liability.  Thus,  "  we  have 
soid  you  on  account  of  J.  M,  &  Co.,"  signed  in  the  agents'  own 
names, does  not  create  a  personal  liability  against  the  agents.^ 
On  the  other  hand  the  signature  might  clearly  be  apt  to  bind 
the  principal  and  not  the  agent,  and  yet  be  so  qualified  by  the 
terms  of  the  contract  itself  as  to  render  the  agent  liable.^ 

§  198.     (IIIj  Effect  of  custom. 

Where  an  agent  contracts,  though  as  agent,  in  a  capacity 
or  business  where,  by  custom,  the  agent  is  usually  liable,  the 
agent  and  the  principal  are  both  |)resumi)tively  liable  and  the 
third  party  may  elect  which  he  will  hold.  The  clearest  case 
of  this  kind  is  that  of  the  master  of  a  ship  who,  when  con- 
tracting within  his  authority,  binds  both  himself  and  the 
owner  according  to  the  custom  of  the  maritime  law,'  though 
the  effect  of  the  custom  may  be  overcome  by  proof  of  contrary 
intent.^  The  custom  of  trade  may  be  shown  in  other  cases  to 
impose  liability  upon  the  agent.^ 

1  Higgins  V.  Senior,  8  M.  &  W.  834. 

2  Norton  v.  Herron,  1  C.  &  P.  618;  McCollin  r.  Gilpin,  6  Q.  B.  D.  516. 
8  Parker  v.  Winlow,  7  El.  &  Bl.  942;  Paice  v.  Walker,  L.  R.  5  Ex. 

173  (but  see  Gadd  v.  Houghton,  L.   R.  1   Ex.  D.  3.37,  where  Paice  v. 
Walker  is  doubted);  Brown  v.  Bradlee,  156  Mass.  28. 

<  JbuJ. ;  Walker  v.  Bank,  9  N.  Y.  582. 

6  Gadd  V.  Houghton,  1  Ex.  Div.  3.57;  Ogden  r.  Hall,  40  L.  T.  R.  751. 

6  Lennard  v.  Robinson,  5  El.  &  Bl.  125 ;  cf.  Heffron  v.  Pollard,  73  Tex.  96. 

f  Tlic  Salacia,  32  L.  J.  Adm.  41 ;  Sydnor  v.  Kurd,  8  Tex.  98. 

8  James  r.  Bixby,  11  !Mass.  34. 

9  Pike  V.  Onglev,  18  Q.  B.  1)   70S 


LIABILITY   IN   CONTRACT.  253 

It  lias  also  been  held  that  although  an  agent  has  so  con- 
tracted as  to  bind  his  principal  alone,  yet  proof  of  custom 
may  be  introduced  to  show  that  the  agent  is  also  liable 
unless  such  proof  is  repugnant  to  the  express  terms  of  the 
writing.  These  cases,  however,  are  those  where  the  princi- 
pal is  not  specifically  named,  as  where  the  agent  contracts 
"as  agent  for  owner,"  or  "as  agent  for  om-  principals."^ 

§  199.     (IV)  Interest  in  subject-matter. 

Where  an  agent  has  an  interest  in  the  subject-matter  of 
the  contract,  the  agent  and  the  principal  are  both  liable,  and 
the  third  party  may  elect  which  he  will  hold.  Such  is  the 
case  where  an  auctioneer  sells  goods,  for  he  has  a  special 
property  in  the  goods  and  could  maintain  an  action  for  the 
price.  It  follows  that  he  is  liable  personally  for  refusing  to 
accept  the  highest  bid,^  or  for  refusing  to  deliver  the  goods 
in  his  possession  sold  by  him  for  a  disclosed  principal,^  or  for 
failing  to  give  authority  to  enter  and  take  the  property  sold  ;* 
but  he  does  not  warrant  title.^ 

4.      Wiere  neither  Principal  nor  Agent  is  hound. 
§  200.     (I;  Revocation  of  authority  by  death. 

Where  the  agent's  authority,  unknown  to  him,  has  been 
revoked  by  the  death  of  his  principal,  and  subsequent  to  such 
revocation  he  makes  a  contract  in  behalf  of  the  former  prin- 
cipal, no  one  is  bound  by  the  contract :  not  the  estate  of  the 
principal,  because  the  agency  is  revoked;^  not  the  agent, 
because  there  is  a  presumption  that  those  who  deal  with  an 
agent  assume  the  risk  that  the  authority  may  be  terminated 
by  death. '^ 

1  A7i(e,  p.  250,  note  6. 

2  Warlow  V.  Harrison,  1  El.  &  El.  309. 
8  Woolfe  V.  Ilorne,  2  Q.  B.  D.  355. 

4  Wood  V.  Baxter,  49  L.  T.  R.  45. 

5  Ibkl. 

6  Blades  i'.  Free,  9  B.  &  C.  167:  Long  v.  Thayer,  150  U.  S.  520 ;  atite, 
§71. 

7  Farmers',  &c.  Co.  v.  Wilson,  139  N.  Y.  284;  Smout  v.  Hbery,  10  M. 
&  W.  1;  Carriger  v.  Whittiugton,  26  Mo.  311. 


254  AGENT    AND    TIIIRU    PARTY- 

§  201.     (II)  Disclosure  of  facts  affecting  authority. 

Where  an  aireiit  discloses  to  a  third  party  all  the  material 
facts  alTecting  the  scojje  of  his  authority,  and  with  full  knowl- 
edge of  such  facts  the  third  party  enters  into  a  contract  with 
the  principal  through  the  agent,  which  contract  is  in  excess 
of  tlie  agent's  anthority,  no  one  is  bonnd  :  neither  the  princi- 
pal, for  he  never  authorized  the  contract ;  nor  the  agent,  for  he 
never  warranted  his  authority.^  An  agent's  liability  on  a 
contract  executed  in  tlie  name  of  his  principal  rests  on  the 
implied  warranties  as  to  the  existence  and  competence  of  his 
principal,  and  the  sniticiency  of  the  authority .^  15ut  clearly 
no  such  warranty  can  be  implied  when  the  third  party  is  as 
fully  informed  of  all  the  facts  as  is  the  agent  himself. 

§  202.     (Ill)  Insufficiency  of  form. 

Where  the  agent  contracts  in  the  name  of  his  principal 
and  within  the  scope  of  his  authority,  but  employs  an  insuffi- 
cient form  of  contract,  no  one  is  bound  :  not  the  principal,  for 
the  contract  cannot  be  enforced,  and  not  the  agent,  for  he 
cannot  be  said  to  warrant  the  sufficiency  of  the  form  of  the 
contract.''^ 

If  the  defect  be  that  an  agent  of  a  corporation  has  attached 
his  own  seal  instead  of  the  corporate  seal,  it  seems  that  while 
the  agent  is  not  liable,  the  corporation  may  be  held  account- 
able in  an  action  of  assumpsit  for  benefits  conferred.^ 

5.    Special  Case  of  Public  Agents. 

§  203.     Public  agents. 

The  rules  governing  the  liabilities  of  a  private  agent  are 
not  generally  applicable  to  j)ublic  agents.     There  is  a  strong 

1  Lilly  V.  Smales,  1892,  1  Q.  B.  450;  INIichael  v.  Jones,  84  Mo.  578; 
Ware  v.  Morgan,  G7  Ala.  4G1 ;  Newman  v.  Sylvester,  42  Ind.  lOG ;  Hall 
r.  Lauderdale,  4G  N.  Y.  70 ;  Snow  v.  llix,  54  Vt.  478. 

"  See  anle^  §  18:5. 

8  Abbey  v.  Chase,  G  Cash.  (Mass.)  54;  Hopkins  v.  Mohaffy,  11  S.  & 
R.  (Pa.)  126;  Neufeld  v.  Beidler,  37  111.  App.  M.  See  Beattie  v.  Lord 
Ebury,  L.  R.  7  Ch.  App.  777. 

*  Whitford  v.  Laidler,  94  N.  Y.  145;  McCauUey  v.  Jenney,  5  Houst. 
(Del.)  32. 


LIABILITY   IN   CONTRACT.  255 

presumption  that  a  public  agent  docs  not  intend  to  bind  liim- 
self  personally,  or  to  become  a  party  to  the  contract.  Even 
a  contract  under  seal,  made  in  the  name  of  a  public  agent, 
will  be  construed  to  be  the  contract  of  the  government  and 
not  of  the  agent,  where,  in  case  of  a  private  agency,  such  a 
result  would  be  impossible;^  a  fortiori  \l  the  contract  be  not 
under  seal.^  But  the  presumption  in  the  agent's  favor  may 
be  overcome  by  clear  proof  of  an  intent  to  render  himself 
personally  liable."^ 

There  seems  to  be  no  good  reason  why  the  same  indulgence 
should  not  be  granted  to  public  officers  who  sign  negotiable 
instruments,  adding  words  descriptive  of  their  office,  and 
several  cases  have  distinctly  decided  that  such  officers  are 
entitled  to  the  usual  presumption.*  But  the  doctrine  is  over- 
looked or  questioned  in  other  cases.^ 

^ome  cases  make  a  further  distinction  to  the  effect  that 
the  presumption  docs  not  extend  in  any  case  to  the  officers 
of  a  muuicipality  or  town  which  is  capable  of  making  con- 
tracts for  itself  and  is  liable  to  be  sued  thereon.^ 

A  public  agent  is  not  liable  for  breach  of  implied  warranty 
of  authority,  since  no  warranty  will  be  implied  in  such  cases.' 

6.     Liability  of  Agent  in  Quasi-cojitract 

§  204.     Money  paid  to  agent  by  mistake  or  fraud. 

An  agent  is  liable  to  a  third  party  in  quasi-contract  under 
the  following  circumstances  :  — 

1  Hodgson  V.  Dexter,  1  Cranch  (U.  S.),  343;  Knight  v.  Clark,  48 
N.  J.  L.  22. 

2  Macbeath  v.  Haldimand,  1  T.  R.  172;  Walker  r.  Swartwout,  12 
Johns.  (N.  Y.)  443;  Savage  v.  Gibbs,  4  Gray  (Mass.),  601;  Parks  v. 
Ross,  11  How.  (U.  S.)  362. 

8  Clutterbuck  v.  Coffin,  3  M.  &  G.  842;  Auty  v.  Hutchinson,  6  C.  B. 
266;  Simonds  v.  Heard,  23  Pick.  (Mass.)  120;  Brown  v.  Bradlee,  156 
Mass.  28. 

*  Monticello  v.  Kendall,  72  Tnd.  91;  Sanborn  v.  Neal,  4  Minn.  126; 
IklcClellan  v.  Reynolds,  49  Mo.  312. 

5  Cahokia  v.  Rautenberg,  88  111.  219 ;  Wing  v.  Glick,  56  Iowa,  473. 

6  Providence  v.  Miller,  11  R.  I.  272;  Brown  v.  Bradlee,  supra. 

7  Dunn  V.  Macdonald,  1897,  1  Q.  B.  401. 


256  AGENT   AND   THIRD   PAKTY. 

(1)  Where  tlic  third  party  has  paid  money  to  the  agent, 
as  agent,  from  a  mistake  of  fact,  or  upon  a  consideration 
which  fails,  and  notice  is  given  the  agent  before  he  pays  the 
money  over  to  his  principal,  or  otherwise  changes  his  legal 
position  on  the  strength  of  such  payment,  the  agent  is  liable 
to  the  tliird  person.^  But  if  the  agent  has  i)aid  the  money 
over  to  his  principal,  or  has  changed  his  legal  position  to  his 
detriment  upon  the  strength  of  the  payment,  he  is  not  liable.^ 
If  the  agent  has  not  acted  as  agent,  but  for  an  undisclosed 
principal,  the  case  escapes  the  doctrines  of  agency  and  is 
treated  like  any  case  of  payment  of  money  by  mistake/^ 

(2)  Where  the  third  party  is  induced  by  the  fraud  of  the 
agent  to  pay  him  money,  he  may  recover  the  money  from  the 
agent,  whether  the  latter  has  paid  it  over  to  his  pi-incipal  or 
not."*  The  same  result  follows  if  an  agent  receives  for  his 
principal  money  which  the  law  forbids  him  to  receive,  as  from 
an  insolvent  debtor.^  If  the  duress  or  fraud  is  that  of  the 
principal  and  not  the  agent,  the  latter  would  be  protected  by 
a  payment  in  good  faith  to  the  former.*^ 

(3)  Where  the  third  party  pays  the  money  to  the  agent 
through  compulsion  or  extortion,  even  though  no  notice  has 
been  given  and  the  agent  has  paid  the  money  to  the  principal, 
an  action  may  be  brought  against  the  agent  for  its  recovery.'' 
But  where  the  third  party  pays  the   money  voluntarily,  or 

1  Duller  i:  Ilarnson,  Cowp.  565;  Cox  r.  Prentice,  3  M.  &  Sel.  344-,  La 
Farge  r.  Kiieeland,  7  Cow.  (-N.  Y.)  450;  Caljot  v.  Shaw,  148  Mass.  459; 
Shepard  v.  Slierin.  43  Minn.  382;  O'Connor  r.  Clopton,  GO  Miss.  349; 
Smith  V.  Binder,  75  111.  492. 

2  Holland  V.  Russell,  4  B.  &  S.  14;  Ellis  v.  Goulton,  1.S93.  1  Q.  B. 
350 ;  r.  S.  V.  Pinover,  3  Fed.  Rep.  305 ;  Fry  v.  Lockwood,  4  Cow.  (N.  Y.) 
454. 

»  Newall  r.  Tonilinson,  L.  R.  G  C.  P.  405;  Smith  v.  Kelly,  43  Mich. 
390. 

*  Snowdf.n  v.  Davis,  1  Taunt.  359;  Smith  v.  Sjeap,  12  M.  &  W.  585; 
Moore  n.  Shield.s,  121  Ind.  267;  Larkin  v.  Ilapgood,  56  Vt.  597. 

6  Larkin  v.  Hajjgood,  56  Vt.  597;  Ex  parte  Edwards,  13  Q.  B.  D. 
747. 

6  Owen  V.  Cronk,  1895,  1  Q.  B.  265. 

»  Elliott  V.  Swartwout,  10  Pet.  (U.  S.)  137. 


LIABILITY   IN   CONTRACT.  257 

where  a  personally  innocent  agent  has  before  notice  paid  the 
money  over  to  the  principal,  the  agent  is  not  liable.^ 

§  205.     Money  received  to  the  use  of  the  third  party. 

(4)  Where  the  ngent  has  received  money  from  his  prin- 
cipal to  be  paid  to  the  third  party,  and  undertakes  with  such 
party  so  to  pay  it,  but  instead  converts  it  to  his  own  use,  tlie 
third  party  may,  at  his  election,  proceed  against  the  agent 
as  for  money  had  and  received  to  his  use.^  But  he  is  not 
liable  in  such  case  unless  he  has  agreed  expressly  or  impliedly 
to  pay  the  third  person.^  An  election  to  hold  the  agent  is 
final  and  discharges  the  principal  from  further  liability.'*  If 
the  agent  after  receiving  the  money  promises  to  pay  the  third 
party,  he  is  liable  upon  his  promise,  and  "  No  consideration 
need  pass  as  between  the  agent  and  the  creditor.  The  funds 
in  his  hands  are  a  sufficient  consideration  for  his  agreement."  ^ 
And  it  has  been  held  that  if  the  third  party  requests  the  agent 
to  pay  to  X  the  money  which  the  principal  directed  the  agent 
to  pay  to  the  third  party,  and  the  agent  agrees  to  do  so,  X 
may  maintain  an  action  against  the  agent.  "  An  action  for 
*  money  had  and  received '  is  a  most  liberal  action,  and  may 
be  as  comprehensive  as  a  bill  in  equity."^  This  falls  under 
the  doctrine  of  a  "  promise  for  the  benefit  of  a  third  person," 
and  escapes  the  general  doctrine  as  to  privity  of  contract.^ 

7.     Liahility  of  Tliird  Person  to  Agent. 

§  206,     Introduction. 

Since  the  agent  may  be  liable,  either  solely,  or  in  common 
with  the  principal,  on  contracts  entered  into  in  behalf  of  the 

1  Owen  V.  Cronk,  1895,  1  Q.  B.  265. 

2  Crowfoot  V.  Gurney,  9  Bing.  37-2;  Walker  r.  Eostron,  9  M.  &  W. 
411;  Keene  v.  Sage,  75  Me.  138;  Beach  v.  Ficke,  94  Iowa,  283. 

3  Howell  V.  Batt,  5  B.  &  A.  504;  Malcolm  v.  Scott,  5  Ex.  601 ;  Baron 
V.  Husband,  4  B.  &  A.  611. 

*  Beach  v.  Ficke,  supra. 

5  Goodwin  v.  Bowden,  54  Me.  424. 

^  Keene  v.  Sage,  supra. 

T  Ante,  §  118. 

17 


258  AGENT   AND   THIRD    rARTT. 

latter,  it  should  follow  that  the  contractual  obligation  is 
recipi'ocal  and  that  the  third  person  is  also  liable  to  the  agent. 
Such  is  found  to  be  the  case.  The  right  of  the  agent  to 
sue  the  third  person  may  be  treated  under  the  following 
classes :  — 

1.  Where  the  agent  alone  may  sue. 

2.  Where  tlie  agent  or  principal  may  sue,  but  the  princi- 
pal may  control  the  suit. 

3.  Where  the  agent  or  principal  may  sue,  but  the  princi- 
pal cannot  control  the  suit. 

§  207.     (I)  Where  the  agent  alone  may  sue. 

1.  Sealed  instruments.  Where  an  agent  contracts  in  his 
own  name  in  a  sealed  instrument,  he  alone  can  sue  upon 
it.^  But  it  seems  that  any  defence  good  against  his  prin- 
cipal may  be  set  up  in  such  suit,  since  the  action,  though  in 
the  name  of  the  agent,  is  for  the  benefit  of  the  princi])al.2 
So  also  any  defence  good  against  the  agent  may  be  set  up, 
even  if  it  would  not  be  good  against  the  principal  in  case 
he  could  sue  in  his  own  namc.^  It  follows  that  the  third 
party  may  avail  himself  of  any  defence  or  set-off  that  would 
be  good  against  either  principal  or  agent,  for  he  is  entitled 
to  defend  against  the  party  of  record,  and  he  is  equally  en- 
titled to  defend  against  the  one  for  whose  use  the  action  is 
brought. 

2.  Negotiable  instruments.  It  is  also  a  technical  rule  of 
the  law  merchant  that  if  the  agent  is  named  as  the  payee 
of  a  negotiable  instrument,  he  alone  can  sue  upon  it.'*  As 
already  pointed  out,  this  technical  rule  has  very  generally 
been  ignored  in  cases  where  there  is  any  indication  by  the 
addition  of   the  word   "  agent,"   or   its   equivalent,  that   the 

1  Ante,  §§  134,  188;  Shack  v.  Anthony,  1  M.  &  S.  573;  Berkeley  v. 
Hardy,  5  B.  &  C.  355;  Clarke  v.  Courtney,  5  Pet.  (U.  S.)  319. 

^  Bliss  V.  Sneath,  10:5  Cal.  43;  cf.  Isberg  v.  Bowden,  8  Ex.  852,  which 
must  be  regarded  as  inapplicable  where  equitable  defences  are  permitted. 

8  Gibson  v.  Winter,  5  B.  &  A.  9G. 

*  §§  1.35,  194;  United  States  Bank  v.  Lyman,  20  Vt.  666;  Fuller  v. 
Hooper,  3  Gray  (Mass.),  334;  Grist  v.  Backhouse,  4  Dev.  &  B.  (N.  C.) 
362;  Cocke  v.  Dickens,  4  Yerg.  (Tenu.)  29. 


LIABILITY  IN   CONTKACT.  259 

payee  is  a  representative  of  an  unnamed  principal.^  This 
is  especially  true  of  instruments  payable  to  one  described 
as  "  cashier."  2  The  technical  rule  itself  can  give  little  real 
difficulty,  since  the  payee  may  by  indorsement  confer  an 
unquestioned  right  upon  the  principal  to  maintain  the 
action. 

3.  Right  restricted  to  agent.  Where  the  right  to  sue  on 
a  contract  is  by  its  express  terms  restricted  to  the  agent,  he 
alone  can  sue.^ 

4.  Ostensible  agent  really  principal.  Where  one  contracts 
as  an  agent,  but  is  in  reality  the  principal,  he  may  sue  upon 
the  contract,  provided  after  knowledge  of  the  fact  that  he 
is  the  I'eal  principal  the  third  party  recognizes  him  as  prin- 
cipal,* or  in  case  the  identity  of  the  principal  is  not  a  con- 
trolling consideration  in  the  contract,^  and  due  notice  of  the 
facts  has  been  given  to  the  third  party  before  action  is 
brought.^  It  has  been  held,  however,  that  where  a  memo- 
randum is  signed  by  brokers  as  agents  for  an  unnamed 
principal,  and  they  afterward  declare  themselves  as  princi- 
pals, the  memorandum  so  signed  does  not  satisfy  the  Statute 
of  FraudsJ  But  where  the  agent  James  represented  that 
he  was  the  principal  John,  and  made  and  executed  a  contract 
in  the  name  of  John,  it  was  held  in  an  action  by  John  that 
the  Statute  of  Frauds  was  satisfied.^  If  the  agent  intends 
and  professes  to  contract  for  a  principal  and  not  for  him- 

1  Ante,  §  135. 

2  First  N.  B.  v.  Hall,  44  N.  Y.  395. 

3  Ante,  §  133;  Humble  v.  Hunter,  12  Q.  B.  310;  Lucas  v.  De  la  Cour, 
1  M.  &  S.  249. 

4  Rayner  v.  Grote,  15  M.  &  W.  359. 

5  Schmaltz  v.  Avery,  16  Q.  B.  655,  where  plaintiff  contracted  in  hia 
own  name  "as  agent  for  the  freighter,"  ami  the  court  held  that  as  the 
supposed  freighter  was  not  named,  the  defendants  could  not  have  con- 
tracted with  reference  to  his  solvency  or  credit. 

6  Bickerton  v.  Burrell,  5  M.  &  S.  383. 

'  Sharman  v.  Brandt,  L.  R.  6  Q.  B.  720.  There  are  some  expressions 
in  this  case  indicating  that  the  ostensible  agent  could  not  sue  because  the 
contract  was  not  made  with  hira. 

8  Hunter  v.  Giddiugs,  97  Mass.  41. 


2G0  AGENT   AND   THIRD   PARTY. 

self,  the    fact   that   the  principal    is  non-cxistciit   or   under 
disability  docs  not  make  the  agent  a  contracting  party.^ 

A  distinction  has  been  stated  between  cases  where  the 
ostensible  agent  names  a  principal,  and  where  he  asserts 
his  agency  but  does  not  name  his  principal.^  In  the  first 
case  it  is  said  the  ostensible  agent  cannot  sue  because 
clearly  there  was  no  intention  to  give  credit  to  him,^  while 
in  the  second  case  he  may  sue  because  there  was  at  least 
no  intention  manifested  to  give  credit  to  any  other  person.^ 
It  is  admitted,  however,  that  even  in  the  first  case  the  agent 
may  sue  if  the  contract  has  been  performed  by  him  with  the 
acquiescence  of  the  third  party ,''^  and  it  has  been  suggested 
that  the  same  result  would  follow  if  the  agent,  before  bring- 
ing the  action,  gives  due  notice  of  the  actual  state  of  the 
facts.^ 

§  208.     (II)  Where  either  agent  or  principal  may  sue. 

The  agent  or  the  principal  may  sue  on  contracts  made  by 
the  agent  on  behalf  of  his  principal, —  (1)  where,  the  agent 
contracts  personally,"  or  (2)  where  the  agent  has  a  special 
property  in  the  subject-matter  of  the  contract  or  a  bene- 
ficial interest  in  it.^ 

(1)  Where  the  agent  and  principal  are  both  bound  on  the 
contract,^  the  primary  right  to  maintain  an  action  against 
the  third  party  is  in  the  principal,  but,  subject  to  his 
assent  express  or  tacit,^*^  the  agent  may  maintain  an  action 

1  Ilollman  v.  Pullin,  1  C.  &  E.  254. 

2  Dicey  on  Parties  (Am.  ed.),  Rules  18  and  10,  pp.  164-1G8;  Mccham 
on  Agency,  §  7G0. 

^  Compare  Boulton  v.  Jones,  2  II.  &  N.  56-1;  Boston  Ice  Co.  v.  Potter, 
123  Mass.  28. 

^  Schmaltz  v.  Avery,  supra. 

6  Rayner  v.  Grote,  supra. 

6  Bickerton  v.  Burrell,  5  M.  &  S.  383  ;  Foster  v.  Smith,  2  Cold.  (Tenn.) 
474. 

'  J  n^e,  §§196-198. 

8  Ante,  §  109. 

•  Ante,  §  196  et  seq. 
"  Sadler  v.  Leigh,  4  Camp.  194. 


LIABILITY  IN   CONTRACT.  261 

wherever  an  action  could  be  maintained  against  the  agent.^ 
"  It  is  a  well-established  rule  of  law  that  when  a  contract 
not  under  seal,  is  made  with  an  agent  in  his  own  name 
for  an  undisclosed  principal,  either  the  agent  or  the  prin- 
cipal may  sue.  If  the  agent  sues,  it  is  no  ground  of  defence 
that  the  beneficial  interest  is  in  another,  or  that  the  plain- 
tiff, when  he  recovers,  will  be  bound  to  account  to  another. 
.  .  .  The  agent's  right  is,  of  course,  subordinate  to  and 
liable  to  the  control  of  the  principal,  to  the  extent  of  his 
interest.  He  may  supersede  it  by  suing  in  his  own  name, 
or  otherwise  suspend  or  extinguish  it,  subject  only  to  the 
special  right  or  lien  which  the  agent  may  have  acquired."  ^ 
The  right  of  the  agent  to  sue  ceases  with  the  termination 
of  the  agency,  whether  the  agency  is  terminated  by  the  act 
of  the  parties  or  by  operation  of  law.-^ 

These  cases  are  those  in  which  the  agent  contracts  in  his 
own  name,  but  in  behalf  of  his  principal,  the  contract  not 
being  under  seal,  or  a  negotiable  instrument,  or  expressly 
restricted  to  the  agent,* 

In  these  cases  the  right  of  the  agent  to  sue  ceases  upon 
the  intervention  of  the  principal,  and  a  settlement  with  the 
principal  is  a  good  defence  to  an  action  by  the  agent.^ 

The  right  of  the  agent  to  sue  does  not  pass  to  his  assignee 
in  bankruptcy  where  the  agent  has  no  beneficial  interest  in 
the  contract.^ 

The  third  party  may  avail  himself  of  any  defence  or  set- 

1  Joseph  V.  Knox,  3  Camp.  320;  Gardiner  v.  Davis,  2  C.  &  P.  49; 
Cooke  V.  Wilson,  1  C  B.  n.  s.  153;  U.  S.  Tel.  Co.  i-.  Gildersleeve,  29 
Md.  232;  Ludwig  v.  Gillespie,  105  N.  Y.  653.  This  right  is  not 
taken  away  by  code  provisions  requiring  actions  to  be  brought  in  the 
name  of  the  real  party  in  interest.  Albany,  &c.  Co.  i'.  Lundberg,  121 
U.  S.  451 ;  Harrigan  v.  Welch,  49  Mo.  App.  496  ;  Rowe  v.  Rand,  111  Ind. 
206. 

2  Rhoades  v.  Blackiston,  106  Mass.  334. 

8  Miller  v.  State  Bank  of  Duluth,  57  Minn.  319. 
4  Ante,  §§  123,  196-199. 

6  Sadler  v.  Leigh,  4  Camp.  195;  Atkinson  v.  Cotesworth,  3  B.  &  C.  647; 
Dickenson  v.  Naul,  4  B.  &  A.  638. 

6  Rhoades  v.  Blackiston,  106  Mass.  334. 


262  AGENT  AND  THIRD  PARTY. 

off  good  against  the  agent,  as  well  as  any  good  against  his 
{)rineij)al.^ 

§  209.     (Ill)  Same.  —  "Where  principal  cannot  control  the  suit. 

(2)  Where  the  agent  has  a  special  property  in  or  lien 
upon  the  subject-matter  of  the  contract,'^  he  may  maintain 
an  action  in  his  own  name  free  from  the  control  of  the 
princiiial,''  at  least  to  the  extent  of  his  interest.  But  such 
an  interest  must  exist  in  order  to  give  the  agent  a  right 
of  action;*  though  this  will  be  presumed  where  the  agent 
is  one  who  usually  has  such  an  interest,  as  an  auctioneer  ^ 
or  factor.^  The  measure  of  damages  is  the  same  whether 
the  suit  be  brought  in  the  name  of  the  agent  or  in  that 
of  the  principal."  A  settlement  with  the  principal  cannot 
be  ])leaded  as  a  defence  to  the  agent's  action  ^  unless  the 
agent  has  led  the  third  person  to  believe  that  he  acquiesces 
in  such  settlement.^ 

§  210.     Liability  in  quasi-contract. 

Where  the  agent  has  paid  money  by  mistake  to  the  third 
party,  he  may  maintain  an  action  for  its  recovery.  It  seems 
either  the  principal  or  the  agent  may  sue,^*^  and  as  the  agent 
is  liable  to  the  principal  for  negligence  in  the  conduct  of 
the  business,  this  may  be  the  only  way  in  which  the  agent 
can  protect  himself  against  loss.^^ 

1  Smith  V.  Lyon,  3  Camp.  465 ;  Gibson  v.  Winter,  5  B.  &  A.  96. 

2  Ante,  §  i;i9. 

*  Chitty  on  Pleading,  p.  8;  Driiikwater  v.  Goodwin,  Cowp.  251;  Rowe 
V.  Rand,  111  Ind.  206;  Thompson  v.  Kelly,  101  Mass.  291. 

*  Fairlie  v.  Fenton,  L.  R.  5  Ex.  109.  (Brokers  do  not  usually  have 
such  interest.) 

6  Williams  v.  Millington,  1  H.  Bl.  81 ;  Minturn  v.  Main,  7  N.  Y.  220. 
«  Drinkwater  v.  Goodwin,  Cowp.  251 ;  Groover  v.  Warfield,  50  Ga.  614. 
'  Evrit  I'.  Bancroft,  22  Oh.  St.  172. 

«  Atkyns  v.  Amber,  2  Esp.  49:5;  Robinson  v.  Rutter,  4  El.  &  Bl.  954. 
e  Grice  r.  Kenrick,  L.  R.  5  Q.  B.  340. 

"  Stevenson  v.  Mortimer,  Cowp.  805;  Oora  v.  Bruce,  12  East,  225; 
Holt  r.  Ely,  1  El.  &  Bl.  795. 

"  Kent  V.  Bernstein,  12  Allen  (xMass.),  342. 


LIABILITY   IN   TOUT.  263 


CHAPTER  XVI. 

TORTS  BETWEEN    AGENT   AND    THIRD   PARTY. 

§  211.     Agent  liable  for  misfeasance. 

An  agent  is  personally  liable  to  third  persons  for  loss  or 
damage  occasioned  to  them  by  his  misfeasance  when  acting 
on  behalf  of  his  principal,  whether  the  act  or  omission 
constituting  the  misfeasance  was  authorized  or  not.^  It  is 
no  defence  to  allege  his  principal's  orders,  or  that  he  acted  in 
good  faith  believing  his  principal  had  directed  only  what 
might  lawfully  be  done.^  "  The  warrant  of  no  man,  not  even 
the  king  himself,  can  excuse  the  doing  of  an  illegal  act,  for 
although  the  commanders  are  trespassers,  so  are  also  the 
persons  who  did  the  fact."  ^  It  is  immaterial  that  the  agent 
derives  no  personal  benefit  from  the  wrong. 


.4 


§  212.     "Whether  agent  liable  for  non-feasance. 

An  agent  is  not  liable  to  a  third  person  for  a  mere  non- 
feasance, or  not  doing  at  all  that  which  he  has  agreed  with 
his  principal  to  do.  This  is  merely  another  way  of  stating 
that  no  one  can  sue  for  a  breach  of  duty  except  the  one  to 
whom  the  duty  is  owing.^     The  first  problem  in  such  cases  is 

1  Cullen  V.  Thomson,  4  Macq.  424;  Swift  v.  Jewsbury,  L.  R.  9  Q.  B. 
301;  Campbell  r.  Hillman,  15  B.  Mon.  (Ky.)  508;  Weber  v,  Weber,  47 
Mich.  569;  Hamlin  v.  Abell,  120  Mo.  188. 

2  Bates  V.  Pilling,  6  B.  &  C.  38;  Mill  v  Hawker,  L.  R.  10  Ex.  92;  Lee 
V.  Mathews,  10  Ala.  682;  Williams  v.  Merle,  11  Wend.  (N.  Y.)  80. 

3  Sands  V.  Child,  3  Lev.  352.  See  also  Whitfield  v.  Lord  Le  Despencer, 
2  Cowp.  754.  The  command  of  the  State  is,  however,  a  defence  in  an 
action  by  a  subject  of  a  foreign  State.  Bnron  v.  Denman,  2  Ex.  167  ; 
Pollock  on  Torts  (5th  ed.),  pp.  104-109;  post,  §  294. 

*  Weber  v.  Weber,  supra. 

5  Dicey  on  Parties  (Am.  ed.),  p.  489 ;  Story  on  Agency,  §  309 ;  Lane 
V.  Cotton,  12  Mod.  472;  Delaney  v.  Rochereau,  34  La.  An.  1123. 


264  AGENT    AND    THIRD    PARTY. 

to  ascertain  whether  any  duty  is  owing  to  any  other  pcrs(ni 
than  the  principal,  or  specifically  to  the  third  person  injured 
by  the  non-feasance. 

Whether  an  act  or  omission  resulting  in  injury  to  a  tliird 
person  is  a  mere  non-feasance,  or  whether  it  is  a  misfeasance 
or  breach  of  duty  toward  a  third  person,  involves  distinctions 
of  a  subtle  character.^  This  matter  will  be  more  fully  treated 
in  a  subsequent  section.^ 

§  213.     Special  instances  of  misfeasance. 

(1)  Fraud.  An  agent  is  personally  liable  for  his  own 
frauds  committed  in  the  course  of  the  agency,  although  com- 
mitted for  the  ])rinci pal's  benefit.^  "  A  person  cannot  avoid 
responsibility  merely  because  he  gets  no  personal  advantage 
from  his  fraud.  All  persons  who  are  active  in  defrauding  others 
are  liable  for  what  they  do,  whether  they  act  in  one  capacity 
or  another.  .  .  .  While  it  may  be  true  that  the  j)rincipal  is 
often  liable  for  the  fraud  of  his  agent  though  himself  honest, 
his  own  fraud  will  not  exonerate  his  fraudulent  agent."  ^  It 
is,  of  course,  necessary  that  the  essential  elements  of  deceit 
should  be  present  in  order  to  found  an  action  in  tort.  There- 
fore if  the  agent  makes  the  representation  believing  it  to  be 
true,  he  is  not  guilty  of  fraud,  although  his  principal  may 
have  known  it  to  be  false.^  But  if  he  knows  it  to  be  false, 
then  whether  his  princij)al  knew  it  or  not,  and  whether  it 
was  authorized  or  unauthorized,  he  is  liable.** 

(2)  Conversion.     "  Any  ])crson  who,  however    innocently, 

1  Delaney  r.  Kochereau,  .tuprn :  Osborne  v.  Morgan,  130  Mass.  102; 
Baird  v.  Shipman,  132  111.  10. 

2  Post,  §  291. 

8  Swift  *•.  Jewsbury,  L.  R.  9  Q.  B.  301 ;  Campbell  v.  Ilillman,  15  B. 
Mon.  (Ky.)  508;  Ileddeu  v.  (iriffin,  136  Mass.  229 ;  Allen  r.  llartfield, 
70  111.  358;  Clark  /•.  Levering,  37  Minn.  120;  Hamlin  v.  Abell,  120  Mo. 
188. 

♦  Weber  v.  Weber,  47  Mich.  509. 

''  Eaglesfield  r.  Londonderry,  38  L.  T.  303;  20  W.  R.  510.  See  ante, 
§  152. 

6  Pollock  on  Torts  (5tli  ed.),  pp.  290-291;  Ilempfling  v.  Burr,  .59  Mich. 
294. 


LIABILITY   IN   TORT.  265 

obtains  possession  of  goods  of  a  person  who  has  been  fraud- 
ulently deprived  of  them,  and  disposes  of  them,  whether  for 
his  own  benefit  or  that  of  any  other  person,  is  guilty  of 
conversion."  ^  Accordingly  an  agent  is  bound  to  know  that 
his  principal  has  title  to  the  goods  which  form  the  subject- 
matter  of  the  agency.  "  He  who  assumes  to  deal  or  inter- 
meddle with  personal  property  which  is  not  his  own  must  see 
to  it  that  he  has  a  warrant  therefor  from  some  one  who  is 
authorized  to  give  it."  ^  If  an  agent  sells  stolen  bonds  for 
the  thief  and  pays  the  proceeds  over  to  his  principal,  he  is 
liable  to  the  true  owner  for  conversion,  and  it  is  no  defence 
that  he  acted  innocently  or  that  the  bonds  were  negotiable.^ 
So  if  one  act  innocently  as  the  agent  of  one  of  two  joint 
owners  of  a  chattel  and  sell  the  entire  chattel  without  the 
consent  of  the  other  joint  owner,  he  is  liable  for  conversion.* 

A  doubt  was  expressed  by  some  of  the  judges  in  the  case 
of  Rollins  V,  Fowler  °  whether  the  rule  was  as  broad  as  is 
above  stated,  and  one  American  case  at  least  has  held  that  a 
factor  is  not  liable  for  selling  stolen  goods  unless  after  demand 
or  notice.*"     But  the  weight  of  authority  sustains  the  rule.^ 

The  agent  is  therefore  liable  to  the  true  owner  if,  having 
possession  of  the  latter's  goods,  although  believing  them  to 
belong  to  the  principal,  he  sells  and  delivers  them,^  or  un- 
qualifiedly refuses  to  deliver  them  up  to  the  true  owner  upon 
demand.^  But  if  he  have  not  possession,  a  mere  contract  to 
sell  is  not  a  conversion. ^"^     So  also  a  mere  transportation  of 

1  Rollins  V.  Fowler,  L.  R.  7  H.  L.  757. 

2  Spraights  v.  Hawley,  39  N.  Y.  441. 

3  Kimball  v.  Billings,  55  Me.  147  ;  Swim  v.  Wilson,  90  Cal.  126. 
*  Perminter  v.  Kelly,  18  Ala.  716. 

6  L.  R.  7  H.  L.  757. 

6  Roach  V.  Turk,  9  Heisk.  (Tenn.)  708.  And  see  Leuthold  v.  Fair- 
child,  35  Minn.  99,  111. 

^  Hoffman  v.  Carow,  20  Wend.  21,  s  c.  22  Wend.  285;  Rice  v.  Yocura, 
155  Pa.  St.  538  J  Robinson  v.  Bird,  158  Mass.  357. 

8  Consolidated  Co.  v.  Curtis,  1892,  1  Q.  B.  495. 

9  Alexander  v.  Southey,  5  B.  &  Aid.  247 ;  Spraights  v.  Hawley,  89 
N.  Y.  441. 

10  Barker  v.  Furlong,  1891,  2  Ch.  172. 


26G  AGENT   AND   THIRD   PAKTY. 

the  goods  for  the  possessor  is  not  a  conversion,  where  it 
results  only  in  a  change  of  position  and  not  of  property  or 
possession. 1 

(3)  Other  wrongs.  An  agent  is  personally  liable  for  an 
illegal  use  of  process,  ^  malicious  prosecution,  ^  libel,  ^  in- 
fringement of  patent,  ^  or  other  act  of  misfeasance. 

§  214.     Whether  principal  and  agent  are  liable  jointly. 

The  question  as  to  whether  the  principal  and  agent  may 
be  sued  jointly  has  given  rise  to  some  discussion.  Two 
classes  of  cases  are  distinguishable  : 

(1)  Where  the  principal  and  agent  are  in  fact  joint  tort- 
feasors, as  where  the  princij)al  commands  the  wrong  to  be 
done,  and  therefore  purposely  participates  in  it,  the  two 
may  be  sued  jointly.^  They  are  in  no  different  position  than 
any  other  joint  tort-feasors.  In  trespass  all  participants  are 
regarded  as  joint  tort-feasors."  If  there  are  two  or  more 
principals,  one  or  all  or  any  number  may  be  joined.^ 

(2)  Where  the  principal  and  agent  arc  not  in  fact  joint 
■wrong-doers,  but  the  ijrincipal's  liability  rests  upon  the  ground 
of  public  policy  heretofore  explained,^  there  is  a  difference  of 
opinion  as  to  whether  the  two  are  liable  jointly.  As  stated 
above,  if  both  are  liable  in  trcsj)ass,  they  arc  regarded  as 
joint  wrong-doers  ;  but  if  the  princii)al  is  liable  in  an  action 
on  the  case,  simply  because  of  his  position  as  principal,  it  has 
been  held  that  a  joint  action  would  not  lie.^''  But  it  is  believed 
that  the   w^eight  of  authority  is    otherwise,  and  that  in   any 

1  Metcalf  V.  :\IcLaughUn,  122  Mass.  81;  Gurley  i'.  Arnistead,  148 
Mass.  267. 

2  Bennett  v.  Bayes,  5  H.  &  X.  391. 

3  Wallace  v.  Finberg,  46  Tex.  3.>;  Green  i'.  Elgie,  5  Q.  B.  99. 

*  Maloney  i'.  Bartley,  3  Camp.  210. 

^  Nobel's  Exp.  Co.  v.  Jones,  8  App.  Cas.  5. 
^  Moore  V.  Fitchburg  R.,  4  Gray  (Mass.),  465. 
'  Ilewett  V.  Swift,  3  Allen  (Mass.),  420. 

*  Roberts  v,  Johnson,  58  N.  Y.  613. 
»  Ante,  §§  1 18-150. 

'°  Parsons  v.  Wiiichell,  5  Gush.  (Mass.)  592 ;  Campbell  v.  Portland 
Sugar  Co.,  02  Me.  552,  500. 


LIABILITY   IN   TORT.  267 

case  where  an  action  would  lie  against  the  two  severally  it 
will  lie  against  them  jointly .^ 

§  215.     Liability  of  third  person  to  agent  for  torts. 
The  third  person   is   liable   to   the  agent   for   torts   com- 
mitted against  him  ;   but  the  torts  that   may  be  committed 
against  him  as  agent  are  not  numerous. 

(1)  Where  the  agent  has  a  special  property  in  the  goods 
which  form  the  subject-matter  of  the  agency,  he  may  maintain 
an  action  for  an  injury  to  the  goods  or  for  their  conversion. 
In  such  cases  he  is  both  bailee  and  agent,  and  it  is  a  general 
rule  of  law  that  a  bailee,  or  a  possessor  having  a  special 
property  in  the  goods,  may  maintain  an  action  against  such 
as  injure  or  take  away  the  chattel.^  Indeed  it  is  not  clear 
that  anything  more  than  possession  is  necessary  to  sustain 
the  action.^ 

(2)  Where  the  agent  is  engaged  in  the  sale  of  a  specific 
article,  his  compensation  being  by  way  of  commission  on  his 
sales,  a  false  and  libellous  statement  concerning  such  articles, 
which  diminishes  his  sales  and  profits,  will  found  an  action 
against  the  one  making  the  statement.^ 

(3)  We  have  already  seen  that  the  principal  may  main- 
tain an  action  against  any  one  who  unjustifiably  induces  the 
agent  to  quit  the  employment.^  In  the  same  way,  and  for 
the  same  reasons,  the  agent  may  maintain  an  action  against 
any  one  who  induces  the  principal  to  dismiss  him  from  the 
employment.^ 

1  Dicey  on  Parties  (Am.  ed.  1879),  490;  Stevens  v.  Midland  R.,  10 
Ex.  3.52;  Phelps  v.  Wait,  30  N.  Y.  78;  Shearer  v.  Evans,  89  Ind.  400; 
cf.  White  V.  Sawyer,  16  Gray  (Mass.),  586. 

2  Moore  v.  Robinson,  2  B.  &  A.  817;  Fitzhugh  v.  Wiman,  9  N.  Y.  559, 
567;  Little  v.  Fossett,  34  Me.  545;  Robinson  v.  Webb,  11  Bush  (Ky.), 
464,  483. 

3  Pollock  on  Torts  (5th  ed.),  pp.  313-321 ;  Donahoe  v.  McDonald,  92 
Ky.  123. 

"  *  Weiss  V.  Whittemore,  28  Mich.  366. 

5  Ante,  §  176.     See  also  §  159. 

6  Post,  §  299  :  Chipley  v.  Atkinson,  23  Fla.  206  ;  cf.  Allen  v.  Flood, 
1898,  App.  Cas.  1. 


BOOK  11. 

MASTER  AND   SERVANT. 


INTRODUCTION. 


§  216.     Scope  of  the  subject  of  master  and  servant. 

A  servant  is  a  representative  vested  with  authority  to  per- 
form operative  acts  for  his  master.  He  is  not  vested  with 
authority,  as  servant,  to  create  new  primary  obligations.  He 
may,  however,  in  the  course  of  the  employment,  commit  a 
breach  of  the  existing  primary  obligations  of  his  master  and 
thus  give  rise  to  the  secondary  obligation  to  pay  damages. 
If  the  primary  obligation  was  an  involuntary  one,  or  if,  being 
voluntary,  it  was  one  to  which  the  law  annexed  additional 
involuntary  ones,  we  call  the  breach  of  it  a  tort.^ 

The  chief  subject-matter  of  the  law  of  master  and  servant 
is  tort.  A  servant  in  performing  operative  acts  for  his  mas- 
ter may  wilfully  or  inadvertently  cause  injury  to  the  person 
or  property  of  a  third  person,  and  such  third  person  may  be  a 
stranger  to  the  service  or  may  be  a  fellow-servant.  The  main 
problem  of  the  law  of  master  and  servant  is  to  determine  the 
nature  and  extent  of  the  master's  liability  for  such  torts. 
Other  problems  concern  themselves  with  the  liability  of  the 
master  for  his  own  personal  torts  resulting  in  injury  to  a  ser- 
vant, with  the  liability  of  a  servant  for  his  own  torts,  and 
with  the  criminal  liability  of  a  master  for  the  offences  of  his 
servant.  But  the  central  problem  is  the  nature  and  extent 
of  a  master's  liability  for  the  tortious  acts  or  omissions  of  his 
servant  resulting  in  injury  to  a  stranger  or  to  another  servant. 

At  the  outset,  however,  it  is  necessary  to  determine  that 
the  relation  of  master  and  servant  actually  exists,  and  this,  so 
far  as  not  already  treated,^  calls  for  preliminary  discussion. 

In  discussing  the  matters  characteristic  of  the  law  of  mas- 
ter and  servant,  we  shall,  without  needlessly  traversing  the 

1  Ante,  §§  4-6.  2  j^nte,  Part  I. 


MASTER   AND    SERVANT. 


ground  already  covered  in  this  work,  address  ourselves  to  the 
following  inquiries  :  — 

I.  Who  is  a  servant;  that  is,  when  does  the  relation  of 
master  and  servant  exist  in  fact,  so  that  the  master  is  liable 
for  any  of  the  acts  or  omissions  of  the  servant  ? 

II.  For  what  acts  or  omissions  of  a  servant  resulting  in 
injurv  to  a  third  person  is  the  master  liable?  In  connection 
with  this  we  shall  inquire  to  what  extent  a  master  is  liable 
criminally,  if  at  all,  for  offences  committed  by  his  servant. 
We  shall  also  inquire  whether  the  doctrine  of  respondeat 
superior  is  applicable  to  puljlic  ofhcers  and  bodies. 

III.  For  what  acts  or  omissions  of  a  servant  resulting  in 
injury  to  a  fellow-servant  is  the  master  of  the  two  servants 
liable?  In  connection  with  this  we  shall  inrpiire  for  what 
personal  acts  or  omissions  of  his  own  resulting  in  injury  to  a 
servant  the  master  is  liable. 

IV.  To  what  extent  is  a  servant  liable  for  his  own  torts 
resulting  in  injury  to  strangers  or  to  fellow-servants? 

V.  For  what  torts  affecting  the  relation  is  a  third  person 
liable  either  to  the  master  or  the  servant  ? 


PAKT  I. 

WHO  IS  A  SERVANT? 

§  217.     Introductory. 

We  have  already  noted  the  distinction  between  a  servant 
and  an  agent.^  We  have  now  to  inquire  whether  one  who  is 
performing  operative  or  ministerial  acts  for  another  is  in  the 
conventional  relation  of  a  servant  to  a  master  or  whether  (1) 
he  is  an  independent  contractor ;  (2)  his  services  have  or 
have  not  been  transferred  to  a  new  master ;  (3)  he  is  compul- 
sorily  employed  or  in  compulsory  service  *  (4)  he  is  a  sub- 
servant  or  a  volunteer. 

1  Ante,  §§  4-6. 


18 


274  WUO  IS  A  SEKVA^'T? 


CHAPTER  XVII. 

INDEPENDENT    CONTRACTORS. 

§  218.     General  rule. 

A  distinction  is  taken  between  a  servant  and  an  independent 
contractor.  When  a  person  desires  a  particular  act  done  he 
may  either  hire  a  workman  to  do  it,  retaining  control  of  the 
servant  and  directing  his  work,  or  he  may  let  the  job.  by  con- 
tract, simply  stipulating  that  it  shall  be  done  in  accordance 
with  certain  specifications,  but  retaining  no  control  over  the 
contractor,  or  over  his  methods  of  work.  In  the  first  case  the 
workman  is  a  servant ;  in  the  second,  he  is  an  independent 
contractor.  In  the  first  case  the  employer  is  legally  respon- 
sible for  the  acts  of  the  employee  done  in  the  course  of  the 
business ;  in  the  second,  he  is  not  generally  responsible  for 
such  acts. 

Whether  the  employer  retains  such  control  over  the  work 
to  be  done,  and  the  manner  of  doing  it,  as  to  render  himself 
responsible  for  injuries  occasioned  by  the  negligence  of  the 
employee  (or  contractor)  in  the  performance  of  the  work 
depends  upon  the  construction  to  be  given  to  the  contract. ^ 

Subject  to  the  exceptions  below  enumerated,  one  who  lets  a 
contract  for  work  and  retains  no  control  over  the  work,  or 
the  methods  of  doing  it,  is  not  liable  for  the  negligence  or 
other  wrong  of  the  contractor.'^ 

To  this  general  rule  there  are  several  exceptions.^ 

1  Liiinehan  v.  Rollins,  137  Mass.  123. 

*  Lawrence  v.  Shipman,  39  Conn.  586;  Blake  v.  Ferris,  5  N.  Y.  48; 
Ilexamer  v.  Webb,  101  N.  Y.  377  ;  Atlanta  K.  Co.  v.  Kimberly,  87  Ga. 
161;  Foster  t'.  Wadsworth-IIowland  Co.,  168  111.  514;  Sinjrer  Mfg.  Co. 
V.  Rahn,  132  U.  S.  518;  Halliday  y.  Nat.  Tel.  Co.,  1891,  1  Q.  B.  221.  See 
Sadler  v.  Ilenlock,  4  E.  &  B.  570  ;  Brackett  v.  Lubke,  4  Allen  (Mass.), 
138,  for  cases  open  to  doubt. 

*  See  various  exceptions  stated  in  Atlanta  R.  v.  Kimberly,  87  Ga. 


INDEPENDENT   CONTRACTORS.  275 

§  219.     Exceptions :  (1)  selecting  competent  contractor. 

It  is  sometimes  stated  that  a  person  may  be  liable  for  the 
negligence  of  an  independent  contractor  if  he  did  not  use 
reasonable  care  to  select  one  competent  to  perform  the  work 
contracted  for.^  There  'are  occasional  dicta  to  this  effect,^ 
and  perhaps  one  or  two  cases  involving  to  some  extent  an 
affirmation  of  the  doctrine  ;  but  there  are  some  cases  squarely 
denying  the  doctrine.^  It  is  urged  that  the  exception  to  the 
general  rule,  if  once  admitted,  would  run  counter  to  business 
customs  under  which  a  contractor  may  estimate  and  contract 
for  work  and  afterward  sub-let  it  to  others  who  are  special- 
ists, would  go  far  toward  destroying  the  whole  doctrine  appli- 
cable to.  independent  contractors,  and  would  "  open  a  new  and 
unlimited  field  for  actions  for  negligence."  ^  It  is  urged  on 
the  other  hand  that  the  exception  imposes  on  one  having 
work  performed  only  a  duty  which  he  fairly  owes  to  the  public 
or  to  adjoining  owners.^ 

§  220.    Exceptions  :  (2)  contracting  for  nuisance. 

If  the  employer  contracts  for  a  nuisance  or  other  unlawful 
act,  he  remains  liable  to  any  person  injured  in  consequence  of 
the  performance  of  the  contract.^  Perhaps  the  exception  is 
even  broader  than  this.  In  one  case  it  is  stated,  by  way  of 
dictum,  to  be  this  :  "  If  a  contractor  faithfully  performs  his 
contract,  and  a  third  person  is  injured  by  the  contractor,  in 
the  course  of  its  due  performance,  or  by  its  result,  the  em- 
ployer is  liable,  for  he  causes  the  precise  act  to  be  done  which 

161 ;  Lawrence  v.   Shipman,  39  Conn.  586 ;  Engel  v.  Eureka  Club,  137 
N.  Y.  100, 101 ;  Berg  v.  Parsons,  156  N.  Y.  109,  115. 

1  Berg  V.  Parsons,  90  Hun  (N.  Y.),  267  (overruled  in  156  N.  Y.  109, 
three  judges  dissenting);  Norwalk  Gaslight  Co.  i;..Norwalk,  63  Conn. 
495,  528-529;  Brannock  v.  Elmore,  114  Mo.  55;  Sebeck  v.  Plattdeutsche 
Volkfest  Verein,  64  N.  J.  L.  624. 

2  Lawrence  v.  Shipman,  39  Conn.  586. 

8  Berg  V.  Parsons,  156  N.  Y.  109 ;  Schip  v.  Pabst  Brewing  Co.,  64 
Minn.  22. 

*  Ibid. 

^  Dissenting  opinion  in  Berg  v.  Parsons,  156  N.  Y.  109. 

«  Ellis  V.  Sheffield  Gas  Consumers  Co.,  2  E.  &B.  767;  Deford  v.  State, 
30  Md.  179;  Ketcham  v.  Newman,  141  N.  Y.  205. 


276  WHO   IS   A   SERVANT? 

occasions  the  injury."  ^  Whichever  rule  more  correctly  states 
the  exception,  it  is  at  least  true  that  where  the  contract  calls 
for  the  doing  of  an  act  that  is  itself  wrongful,  the  employer 
remains  liable  for  all  the  consequences,  practically  as  a  joint 
tort-feasor  with  the  contractor. 

§  221.     Exceptions :  (3)  contracting  for  unsafe  result. 

If  the  employer  contracts  for  improper  materials  or  an 
unsafe  plan,  or  generally  an  unsafe  result,  he  remains  liable 
for  damages  occasioned  thereby  although  the  work  is  done  by 
an  independent  contractor.^  "  The  owner  cannot  dictate  that 
his  building  be  constructed  of  improper  materials  or  upon  an 
unsafe  plan,  and  escape  liability  for  injuries  caused  thereby 
because  he  made  a  contract  with  a  third  person  to  build  it."^ 

§  222.  Exceptions :  (4)  statutory  liability  to  conduct  work  effi- 
ciently. 

If  the  employer  is  under  an  obligation  of  positive  law  to  do 
a  particular  thing,  or  to  observe  particular  safeguards,  he 
cannot  relieve  himself  of  this  liability  by  putting  the  work 
into  the  hands  of  an  independent  contractor.^  Thus,  if  he  is 
empowered  by  statute  to  construct  a  bridge,  but  to  have  it 
open  for  navigation  within  a  specified  time,  he  is  not  relieved 
of  liability  for  obstructing  navigation  because  the  independent 
contractor  failed  to  observe  the  terms  of  the  contract.^  If  a 
permit  to  place  building  material  in  the  street  is  coupled  with 
a  condition  that  it  be  lighted  and  guarded,  the  lot  owner  is 
liable  for  the  failure  of  a  contractor  to  light  and  guard 
material  deposited  there.^ 

The  rule  under  this  head  has  been  extended  to  cases  where 
a  railroad  is  by  statute  authorized  to  construct  its  road  across 

*  Lawrence  v.  Shipman,  39  Conn.  58G. 
2  Gorliam  r.  Gross,  125  Mass.  232. 

8  Meier  c.  Morgan,  82  Wis.  289. 

*  Hole  V.  Sittingbourne  R.  Co.,  6  II.  &  N.  488;  30  L.  J.  Ex.  81; 
Reuben  v.  Swigart,  7  Oh.  Dec.  638 ;  Downey  v.  Low,  22  N.  Y.  App.  Div. 
460. 

^  Hole  V.  R.  Co.,  supra. 

*  Reuben  v.  Swigart,  supra. 


INDEPENDENT  CONTRACTORS.  277 

a  highway,  and  by  the  negligence  of  an  independent  con- 
tractor the  highway  is  rendered  unsafe,  even  though  the 
statute  does  not  expressly  require  the  railroad  to  observe 
particular  safeguards. ^ 

§  223.  Exceptions  :  (5)  contract  liability  to  conduct  w^ork  safely. 
If  the  employer  by  express  contract  has  agreed  to  do  an 
act  efficiently  and  safely,  he  cannot,  by  sub-letting  the  work 
to  an  independent  contractor,  relieve  himself  from  liability 
under  his  express  contract.  Thus  where  a  company  under- 
took to  lay  water-pipes  in  a  city,  and  agreed  with  the  city  to 
protect  all  persons  from  damages  and  to  be  responsible  for 
damages  to  all  persons,  and  afterward  sub-let  the  work  to  a 
contractor,  who  in  using  a  steam-drill  injured  a  traveller,  it 
was  held  that  the  company  was  liable.^  But  where  a  license 
was  given  by  a  city  to  a  landowner  to  construct  a  sewer  on 
condition  that  the  work  be  guarded  and  lighted,  and  that  the 
licensee  should  be  answerable  to  any  person  injured  by  the 
failure  so  to  do,  it  was  held  that  the  licensee  was  not 
liable  for  such  neglect  on  the  part  of  an  independent 
contractor.^ 

§  224.     Exceptions:   (6)  extra-hazardous  work. 

If  the  work  to  be  executed  is  extra-hazardous,  and  such 
that  in  the  natural  course  of  things  injurious  consequences 
are  likely  to  ensue,  unless  suitable  means  are  adopted  to  pre- 
vent such  consequences,  the  employer  is  liable  unless  he  uses 
due  care  in  the  adoption  of  such  means.^ 

This  exception  to  the  general  rule  has  not  met  with  univer- 
sal favor.  It  has  been  applied  in  the  cases  just  cited  to  the 
excavation   of   lands   endangering   the  support  of   adjoining 

1  Deming  v.  Terminal  Ry.  Co.,  49  N.  Y.  App.  Div.  493. 

2  Water  Company  p.  Ware,  16  Wall.  566. 
8  Blake  v.  Ferris,  5  N.  Y.  48. 

4  Bower  v.  Peate,  L.  R.  1  Q.  B.  D.  321 ;  4.5  L.  J.  Q.  B.  446 ;  Black  v. 
Christchurch  Finance  Co.,  1894,  A.  C.  48;  Thompson  t'.  Lowell,  &c.  Ry., 
170  Mass.  577 ;  Cameron  v.  Oberlin,  19  Ind.  App.  142  ;  Norwalk  Gaslight 
Co.  V.  Norwalk,  63  Conn.  495;  Bonaparte  y.  Wiseman,  89  Md.  12;  Cov- 
ington, &c.  Bridge  Co.  v.  Steinbrock,  61  Oh.  St.  215;  Wetherbee  v.  Par- 
tridge, 175  Mass.  185. 


278  WHO  IS  a  servant? 

property,  to  an  exhibition  of  marksmanship,  to  the  clearing 
of  land  by  fire,  to  the  removal  of  dangerous  walls,  and  to 
blasting. 

It  has  been  rejected  in  the  case  of  a  contract  for  blasting,^ 
for  an  exhibition  of  balloon  ascension,^  and  for  the  setting 
of  fires.^ 

§  225.     Exceptions  :    (7)  safety  of  premises. 

If  the  owner  of  property  contracts  for  work  to  be  done 
upon  it,  he  is,  as  to  invitees,  bound  to  keep  the  premises  in  a 
safe  condition  and  cannot  excuse  himself  on  the  ground  that 
the  work  is  under  the  exclusive  control  of  a  contractor.*  The 
rule  extends  to  the  protection  of  pedestrians  in  a  public  way 
injured  by  inadvertently  falling  into  unguarded  excavations 
adjacent  to  the  sidewalk,^  and  to  the  protection  of  users  of 
a  highway  against  defective  overhanging  structures.^ 

The  early  case  of  Bush  v.  Steinman'  carried  this  doctrine  to 
the  extreme  point  of  holding  that  where  work  is  done  on  an 
owner's  premises  he  ought  to  reserve  control  over  the  methods, 
and  if  he  does  not,  is  liable  for  all  results.  The  case  has  been 
unfavorably  commented  upon  in  England  and  America,  and  is 
probably  not  now^  law.^ 

§  226.     Exceptions  :  (8)  interference  by  employer. 

If  the  employer  reserves  the  right  to  interfere  with  the 
method  of  work,  and  to  direct  and  control,  the  em])loyer  is 
substantially  a  master  and  remains  liable  under  the  usual 
doctrines  applicable  to  master  and  servant.^     If  the  employer, 

1  Berg  V.  Parsons,  156  N.  Y.  109.  See  M'Xamee  i-.  Hunt,  87  Fed.  R. 
298. 

2  Smith  V.  Benick,  87  Md.  GIO. 

8  St.  Louis,  &c.  R.  V.  Yonley,  53  Ark.  503. 

*  Curtis  V.  Kiley,  153  INIass.  123 ;  Coughtry  v.  Globe  Woolen  Co.,  56 
N.  Y.  124. 

5  Wiggin  V.  St.  Louis,  135  Mo.  .558. 

«  Tarry  i;.  Ashton,  L.  R.  1  Q.  B.  D.  311. 

'  1  B.  &  P.  401. 

8  Reedie  v.  London  &  N.  W.  Ry.,  4  Exch.  244,  256;  Pollock  on 
Torts  (5th  ed.),  p.  76,  note  h :  Blake  v.  Ferris,  5  N.  Y.  48,  62-64.  See 
also  Strauss  v.  City  of  Louisville  (Ky.),  55  S.  W.  1075. 

9  Linnehan  v.  Rollins,  137  iMass.  123. 


INDEPENDENT   CONTRACTORS.  279 

having  reserved  no  right  to  interfere,  does  in  fact  interfere, 
and  the  injury  complained  of  is  the  natural  result  of  such  in- 
terference, the  employer  is  liable.^  In  the  one  case  he  is  still 
the  master  and  liable  as  such  for  the  negligence  of  his  ser- 
vants ;  in  the  other  case  he  is  himself  the  actor  and  liable  for 
the  natural  and  probable  results  of  his  own  acts. 

§  227.     Resumption  of  control  by  owner. 

After  the  work  of  the  contractor  is  completed  and  the 
owner  resumes  control  of  his  property  he  is,  of  course,  liable 
for  its  safe  condition.  It  is  sometimes  a  nice  question 
whether  the  owner  has  resumed  control,  but  this  is  essen- 
tially a  question  of  fact  and  not  of  law.^ 

1  Lawrence  i\  Shipman,  39  Conn.  586,  590;  Berg  r. Parsons,  156  N.Y. 
109,  115;  Atlanta  R.  v.  Kimberly,  87  Ga.  161,  168. 

2  Read  v.  East  Providence  Fire  Dist.,  20  R.  I.  574  ;  Higgins  v.  W.  U. 
Tel.  Co.,  156  N.  Y.  75. 


280  WHO   IS   A   SEliVANT? 


CHAPTER  XYIII. 

TRANSFER  OP  SERVICE. 

§  228.     General  rule. 

The  general  servant  of  one  may  be  put  tcmporarilj  at  the 
service  of  another  and  the  question  then  arises  whether  he  is 
for  the  time  being  the  servant  of  that  other.  The  cases  upon 
this  are  not  entirely  harmonious  and  it  seems  hardly  possible 
to  extract  from  them  a  satisfactory  test.  In  general  it  may 
be  said  that  if  tlie  transfer  of  service  is  complete  so  as  to  give 
the  transferee  the  unqualified  control  of  the  servant,  the  trans- 
feree becomes  for  the  time  the  master  of  the  servant  so  as  to 
render  him  liable  for  the  servant's  wrongful  acts  and  to  give 
him  the  benefit  of  the  fellow-servant  rule.^  While  this  rule 
may  fairly  be  regarded  as  stating  the  law  of  the  decided 
cases,  it  must  be  noted  that  in  applying  it,  the  courts  have 
reached  divergent  results  upon  essentially  similar  facts. 

§  229.     Hiring  horses  and  driver. 

Where  one  hires  horses  and  carriage  with  a  driver  from  a 
livery-stable  keeper,  the  driver  is  the  servant  of  the  livery- 
stable  keeper  and  not  of  the  hirer.^  The  hirer  is  not  liable 
for  the  driver's  negligence,  nor  is  the  negligence  of  the  driver 
imputable  to  the  hirer  so  as  to  bar  the  latter's  recovery  in 
case  he  is  injured  by  the  combined  negligence  of  the  driver  and 
some  third  person.  Neither  is  the  driver  a  fellow-servant  of 
a  servant  of  the  hirer.  The  hirer  may  recover  from  the  owner 
for  the  negligent  management  of  the  vehicle  resulting  in 
injury  to  liim.^ 

1  Rourke  v.  White  Moss  Colliery  Co.,  L.  R.  2  C.  V.  D.  205;  Donovan 
V.  Laing,  L.  R.  1893,  1  Q.  B.  62.0;  Hasty  v.  Sears,  157  Mass.  123; 
Hardy  v.  Shedden  Co.,  78  Fed.  Rep.  610 ;  Gagnon  v.  Uaua,  69  N.  H.264. 

2  Little  V.  Hackett,  116  U.  S.  366;  New  York,  L.  E.  &  W.  R.  v.  Stein- 
brenner,  47  N.  J.  L.  161  ;  Lewis  v.  Long  Island  R.,  162  N.  Y.  52,  66. 

8  But  where  one  hires  a  horse,  carriage,  and  driver,  to  be  used  iu  tak- 


TRANSFER   OF   SERVICE.  281 

From  this  typical  case  there  are  two  variations. 

First,  the  hirer  may  own  his  own  carriage  and  hire  horses 
with  a  driver.  This  was  the  case  of  Laugher  v.  Pointer^  in 
which  the  court  was  evenly  divided.  In  the  later  case  of 
Quarman  v.  Burnett,^  where  the  hirer  not  only  hired  the 
horses  and  a  driver,  but  also  furnished  a  special  livery  for 
the  driver,  the  doubts  left  open  in  the  prior  case  were  settled 
in  favor  of  the  view  that  the  coachman  was  not  the  servant  of 
the  hirer.  The  doctrine  of  this  case  has  been  followed  in 
many  subsequent  English  and  American  cases.^ 

In  a  recent  case  the  hirer  owned  a  hoisting  tackle  affixed  to 
his  warehouse,  and  a  truckman  sent  a  horse  and  driver  to  do 
some  hoisting.  Owing  to  the  negligence  of  a  servant  of  the 
hirer  the  driver  was  injured.  It  was  held  that  the  driver  was 
the  servant  of  the  truckman  and  not  a  fellow-servant  of  the 
negligent  employee.*  "  The  plaintiff  represented  his  general 
master,  the  truckman,  and  was  all  the  time  his  servant,  and 
did  not  become  in  any  legal  sense  the  servant  of  the  defend- 
ant any  more  than  he  would  if  employed  to  move  the  goods  to 
a  railway  station  on  the  truck,  and  if  not  such  servant  he 
could  not,  of  course,  have  become  the  co-servant  of  the  de- 
fendant's regular  workman." 

But  where  a  truckman  hired  a  truck  and  team  and  driver  to 
another,  and  the  latter  built  upon  the  truck  a  superstructure 
for  seats  which  broke  and  injured  the  driver,  it  was  held  that 

ing  out  goods  for  exhibition  and  sale,  the  owner  of  the  carriage  is  not 
liable  for  the  loss  of  the  goods  which  the  hirer  or  his  agent  leaves  un- 
guarded  in  the  carriage,  even  though  the  driver  leave  the  carriage  unat- 
tended while  the  hirer  is  absent.     Abrahams  v.  Bullock,  17  T.  L.  Rep. 

557. 

1  5  B.  &  C.  547.  The  case  was  afterwards  heard  by  twelve  judges, 
but  the  decision  is  unreported.  It  is  known  that  the  judges  were  divided, 
but  whether  equally  is  not  clear.  See  remarks  of  Lord  Russell  of  Killo- 
wen  in  Jones  v.  ScuUard,  1S98,  2  Q.  B.  565,  570. 

2  6  M.  &  W.  499. 

3  Jones  V.  Corporation  of  Liverpool,  L.  R.  14  Q.  B.  D.  890 ;  Joslin  v. 
Grand  Rapids  Ice  Co.,  50  Mich.  516  ;  Huff  v.  Ford,  126  Mass.  24;  Rear 
gan  V.  Casey,  160  Mass.  374;  Burton  v.  G.  H.  &  S.  R.,  61  Tex.  526. 

4  Murray  v.  Dwight,  161  N.  Y.  301. 


282  WHO  IS  a  servant? 

the  driver  was  the  hirer's  servant  and  that  the  truckman  was 
not  liahle.  The  case  was  further  put  upon  tlic  ground  that 
the  driver  assumed  the  risk,  so  far  as  the  truckman  was  in- 
volved, of  the  increased  danger  resulting  from  tlie  act  of  the 
hirer  in  building  the  superstructure.^  Referring  to  the  car- 
riage cases  cited  above  the  court  says :  "  But  the  present,  we 
think,  is  clearly  distinguishable  from  such  a  case,  because  here 
was  not  the  ordinary  hiring  of  a  carriage  for  a  trip,  but  it  was 
the  hiring  of  a  truck  to  be  built  upon,  so  that  its  nature  as  a 
vehicle  was  changed,  and  then  a  separate  hiring  of  the  means 
of  locomotion." 

Second,  the  hirer  may  own  his  own  horses  and  carriage  and 
the  livery-stable  keeper  may  furnish  a  driver.  Under  these 
circumstances,  it  was  recently  decided  that  the  jury  were 
justified  in  finding  that  the  driver  was  the  servant  of  the 
liirer.2  "  The  principle  to  be  extracted  from  the  cases  is 
that,  if  the  hirer  simply  applies  to  the  livery-stable  keeper  to 
drive  him  between  certain  points  or  for  a  certain  period  of 
time,  and  the  latter  supplies  all  necessary  for  that  purpose, 
the  hirer  is  in  no  sense  responsible  for  any  negligence  on  the 
part  of  the  driver.  But  it  seems  to  me  to  be  altogether  a  dif- 
ferent case  where  the  brougham,  the  horse,  the  harness,  and 
the  livery  are  the  property  of  the  person  hiring  the  services 
of  the  driver.  And  in  such  case,  especially  if,  as  here,  the 
driver  has  driven  the  hirer  for  a  considerable  period  of  time 
and  been  approved  by  him,  and  the  horse  is  one  the  charac- 
teristics of  which  neither  the  livery-stable  keeper  nor  the  driver 
has  had  any  practical  opportunity  of  becoming  acquainted  with, 
there  is,  it  seems  to  me,  evidence  upon  which  a  jury  would 
be  justified  in  coming  to  the  conclusion  that  the  driver  was 
upon  the  occasion  in  question  acting  as  the  servant,  not 
of  the  Every-stable  keeper,  but  of  the  person  who  hired 
him."  8 


1  Hardy  v.  Shedden  Co.,  78  Fed.  GIO. 
e  Jones  v.  Scullard,  1898,  2  Q.  B.  565. 

8  Lord  Russell  of  Killowen,  C.  J.,  in  Jones  v.  Scullard,  1898,  2  Q.  B. 
5G5,  574-575. 


TRANSFER   OF   SERVICE.  283 

§  230.     Hiring  machine  and  operator. 

Another  type  of  cases  upon  the  transfer  of  service  is  made  up 
of  instances  of  the  loan  or  rental  of  a  machine  or  mechanical 
device  of  some  sort  together  with  an  operator.  In  such  cases 
the  operator  is  the  general  servant  of  the  owner  of  the  ma- 
chine, but  may  become  temporarily  the  special  servant  of  the 
hirer.  Thus  the  loan  of  an  engine  with  an  engineer  to  run 
it/  or  of  a  hoisting  crane  with  a  man  to  operate  it,^  has  been 
held  in  England  to  constitute  the  operator  the  servant  of  the 
hirer  where  the  latter  had  full  control  over  him.  "  For  some 
purposes,  no  doubt,  the  man  was  the  servant  of  the  defend- 
ants [owners  of  the  crane].  Probably,  if  he  had  let  the 
crane  get  out  of  order  by  his  neglect,  and  in  consequence  any 
one  was  injured  thereby,  the  defendants  might  be  liable;  but 
the  accident  in  this  case  did  not  happen  from  that  cause,  but 
from  the  manner  of  working  the  crane."  ^  The  cases  are  dis- 
tinguished from  the  "  carriage  cases  "  on  the  ground  that  the 
driver  of  a  carriage  is  not  put  under  the  control  of  the  hirer. 
It  has  also  been  held  that  the  engineer  and  crew  of  a  railroad 
switching  engine  operating  temporarily  upon  the  private 
switch  of  a  mill-owner,  and  under  his  orders,  are  the  ser- 
vants for  the  time  of  the  mill-owner  and  not  of  the  railroad 
company.*  So  also  where  a  railroad  company  lets  a  contract 
for  the  construction  of  a  track  and  agrees  to  furnish  and  does 
furnish  a  construction  train  with  an  operating  crew,  the  crew 
are  held  to  be  the  servants  of  the  constructor,  and  not  of  the 
company.^  One  or  two  cases  holding  a  different  doctrine,  and 
following  the  "  carriage  cases,"  have  not  met  with  approval.^ 
So  also  if  the  owner  of  a  lighter  charters  the  boat  and  crew 
to  another,  he  is  not  liable  for  the  negligence  of  the  captain.^ 

1  Rourke  v.  White  Moss  CoTliery  Co.,  L.  R.  2  C.  P.  D.  205. 

2  Donovan  v.  Laing,  1893,  1  Q.  B.  629.  '  Ibid.  p.  632. 
4  Mclnerney  v.  T>.  &  H.  Canal  Co.,  151  N.  Y.  411. 

s  Miller  v.  Minnesota  &  Northwestern  Ry.,  76  Iowa,  655;  Powell  o. 
Construction  Co.,  88  Tenn.  692 ;  Byrne  v.  Kansas  City,  &c.  R.,  61  Fed. 
R.  605. 

6  Burton  v.  G.  H.  &  S.  A.  Ry.,  61  Tex.  526 ;  New  Orleans,  &c.  R.  v. 
Norwood,  62  Miss.  565.     See  also  Coggin  v.  Central  R.  Co.,  62  Ga.  685. 

'  Anderson  v.  Beyer,  156  N.  Y.  93. 


284  ^VII0  IS  a  servant  ? 

The  assent  or  non-ass^ent  of  the  servant  to  the  transfer  of 
service  and  the  substitution  of  masters  may  be  an  important 
element  in  determining  whether  such  transfer  is  complete,  and 
this  question  may  be  so  doubtful  as  to  require  the  verdict  of 
a  jury  for  its  determination.^ 

§  231.     Servants  sent  to  work  on  another's  premises. 

If  the  general  master  is  asked  to  furnish  a  workman  for  a 
particular  service,  and  does  furnish  the  workman,  who  is  sent 
to  work  upon  the  hirer's  premises,  is  the  workman  the  ser- 
vant of  the  hirer  and  a  fellow-servant  of  the  hirer's  regular 
workmen?  Here,  again,  the  answer  must  depend  upon  the 
facts  as  to  the  extent  of  the  hirer's  control  and  the  under- 
standing or  assent  of  the  workman.  Where  an  employer  was 
asked  to  send  a  workman  to  make  rcj)airs  upon  the  hirer's 
mill  or  elevator,  it  was  held  that  the  workman  was  a  servant 
for  the  time  being  of  the  hirer  and  a  fellow-servant  of  the 
hirer's  regular  employees.^  In  both  cases  it  would  seem  that 
the  workman  understood  the  situation  and  imi)liedly  sub- 
mitted himself  to  the  temporary  master.  In  like  manner  a 
contractor  doing  work  on  another's  premises  may  temporarily 
borrow  an  employee  of  that  other  under  such  circumstances 
as  to  render  the  employee  temporarily  the  servant  of  the 
contractor,^ 
§  232.     Physicians  employed  for  benefit  of  servants  or  passengers. 

If  a  railroad  or  other  comi)any  employs  a  competent  physi- 
cian or  surgeon  to  attend  persons  injured  in  its  service  or 
business,  such  physician  or  surgeon  is  not  the  servant  of  the 
company  and  the  company  is  not  liable  for  his  negligence  or 
malpractice,*  even  though  by  law  the  company  is  required  to 

1  Delaware,  Lackawanna,  &c.  R.  Co.,  v.  W.  R.  Hardy,  59  N.  J.  L.  35. 

2  Ewan  V.  Lippincott,  47  X.  J.  L.  192;  Hasty  v.  Sears,  157  jNIass.  123; 
Samuelian  v.  American  Tool  Co.,  168  Mass.  12.  See  also  Wyllie  v. 
Palmer,  137  N.  Y.  248. 

8  Higgins  V.  W.  U.  Tel.  Co.,  156  N.  Y.  75. 

*  Laul.hpim  V.  DeK.  N.  S.  Co.,  107  N.  Y.  228;  Secord  v.  Ry.,  18  Fed. 
R.  221  ;  Quiiin  v.  R.,  94  Tenn.  713;  York  v.  Chicago,  &c.  R.,  98  Iowa, 
544 ;  Atchison,  &c.  R.  v.  Zeiler,  54  Kans.  340 ;  Pittsburgh,  &c.  R.  v. 
Sullivan,  141  Ind.  83. 


TRANSFER   OF   SERVICE.  285 

provide  a  duly  qualified  medical  practitioner.^  The  passenger 
or  employee  may  avail  himself  of  the  services  of  such  practi- 
tioner or  not,  and  the  company  has  practically  no  control  over 
the  treatment  or  care  given  by  the  physician  to  his  patient. 
But  wiierc  the  company  deducts  a  fixed  sum  from  the  wages 
of  employees  with  which  to  provide  hospital  facilities  and  sur- 
geons, it  is  liable  to  an  employee  for  damages  resulting  from 
its  negligence  in  providing  an  incompetent  surgeon.'-^  The 
liability  of  charity  hospitals  is  considered  hereafter.^ 

§  233.  Sleeping-car  porters  also  servants  of  railroad  company. 
It  has  been  held  that  the  conductor  and  porter  of  a  drawing- 
room  car  or  a  sleeping  car  are  the  servants  of  the  railroad 
company  which  makes  this  car  a  part  of  its  train,  although 
the  car  is  owned  and  operated  by  a  separate  company  and  the 
conductor  and  porter  are  employees  of  that  company.  The 
negligence  or  wilful  wrongs  of  such  servants  as  to  matters 
involving  the  safety  or  security  of  passengers,  is  the  negli- 
gence or  wrong  of  the  railroad  company.* 

»  Allan  V.  State  Steamship  Co.,  132  N.  Y.  91;  O'Brien  v.  Cunard 
Steamship  Co.,  154  Mass.  272. 

2  Wabash  R.  v.  Kelley,  153  Ind.  119.  See  also  Richardson  v.  Carbon 
Hill  Coal  Co.,  10  Wash.  648 ;  Cummings  v.  Chicago,  &c.  R.,  89  111.  App. 
199. 

8  Post,  §  261. 

*  Thorpe  v.  N.  Y.  C.  &  H.  R.  R.,  76  N.  Y.  402;  Dwinelle  v.  N.  Y.  C. 
&  H.  R.  R.,  120  N.  Y.  117  ;  Pennsylvania  Co.  v.  Roy,  102  U.  S.  451; 
Railroad  Co.  v.  Walrath,  38  Oh.  St.  461 ;  Williams  v.  Pullman  Palace 
Car  Co.,  40  La.  An.  417. 


286  WHO   IS   A   SERVANT? 


CHAPTER  XTX. 

COMPULSORY   EMPLOYMENT   OR   SERVICE. 
§  234.     Meaning. 

Freedom  of  choice  of  servants  seems  to  be  necessary  in  order 
that  the  master  should  be  liable  for  the  servants'  defaults. 
Freedom  of  choice  of  masters,  or  at  least  of  service,  seems  to 
be  necessary  in  order  that  the  servant  should  be  held  to  have 
assumed  the  risks  of  his  employment.  If,  therefore,  one  is 
compelled  by  law  to  accept  the  services  of  another,  he  ought 
not  to  be  held  liable  for  the  injuries  occasioned  by  that  other's 
acts  or  omissions.  If,  on  the  other  hand,  one  is  compelled 
by  law  to  serve  another,  he  ought  not  to  be  held  to  be  a 
fellow-servant  of  other  employees  so  as  to  bar  him  from 
recovering  for  their  negligence,  since  the  basis  of  the  fellow- 
servant  rule  is  that  the  servant  in  entering  the  employment 
voluntarily  assumes  the  risks  of  the  default  of  fellow-servants. 
We  have  then  to  consider  the  case  of  compulsory  employment 
of  a  servant  and  the  case  of  the  com])ulsory  rendering  of  ser- 
vices, in  determining  the  question,  Who  is  a  servant  ? 

§  235.     Liability  for  servant  compulsorily  employed. 

In  some  cases  —  as  in  the  em{)loyment  of  pilots  —  the  em- 
ployer is  required  by  law  to  employ  only  regularly  designated 
or  licensed  persons  and  in  some  instances  is  bound  to  take 
the  first  of  such  persons  who  presents  himself.  As  the  free- 
dom of  choice  is  thus  limited — or  entirely  eliminated  —  the 
question  arises  whether  the  employee  is  really  the  servant  of 
the  employer  so  as  to  render  the  latter  liable  under  the  usual 
doctrines  applicable  to  master  and  servant. 

The  case  of  limited  selection  has  generally  been  decided  in 
accordance  with  the  usual  doctrine  of  master  and  servant. 
So  long  as  there  is  a  power  of  selection,  even  though  among 


COMPULSORY   EMPLOYMENT   OR   SERVICE.  287 

a  small  number,  the  employer  chooses  his  own  servant  and 
must  remain  liable  for  his  acts  within  the  scope  of  the  em- 
ployment. Thus  where  the  statute  required  that  any  barge 
navigating  the  Thames  should  have  on  board  one  authorized 
or  licensed  bargeman  (of  whom  it  appeared  there  were  about 
six  thousand),  it  was  held  that  a  proprietor  of  a  barge  was 
liable  for  the  negligence  of  one  of  the  licensed  bargemen 
selected  by  him.^  And  where  pilotage  statutes  are  construed 
as  not  compulsory,  the  shipowner  is  held  liable  for  tlie  negli- 
gence of  the  pilot.2  Where  a  mining  company  is  required  by 
law  to  select  an  engineer  from  among  those  licensed  by  the 
state,  the  company  cannot  escape  liability  for  tlie  incompe- 
tence of  an  engineer  so  selected  on  the  plea  that  the  certificate 
of  the  state  examiners  is  conclusive  as  to  the  holder's  com- 
petence.^ But,  contra,  where  the  company  was  required  to 
employ  a  licensed  foreman  a  statute  making  the  company 
liable  for  the  foreman's  negligence  was  declared  unconstitu- 
tional.4 

If  the  employment  of  a  particular  person,  or  of  the  first  of 
a  class  to  present  himself,  is  compulsory,  the  employer  is  not 
liable  for  the  misconduct  of  such  person.  Thus,  it  is  said 
that  a  shipowner  is  not  liable  for  the  negligence  of  a  com- 
pulsory pilot,  because  the  pilot  is  not  deemed  to  be  acting  as 
his  servant,  but  as  an  officer  imposed  by  the  state.^  There 
are  numerous  English  authorities  to  support  this  proposition,^ 
and  the  English  statutes  now  expressly  provide  that  the 
owner  shall  not  be  liable  for  the  acts  of  the  compulsory  pilot.^ 

1  Martin  v.  Temperley,  4  Q.  B.  298. 

2  Bussey  v.  Donaldson,  4  Dall.  (Pa.)  206;  Yates  v.  Brown,  8  Pick. 
(Mass.)  22;  Dennison  v.  Seymour,  9  Wend.  (N.  Y.)  9. 

3  Consolidated  Coal  Co.  v.  Seniger,  179  111.  370,  374-375. 

*  Durldu  V.  Kingston  Coal  Co.,  171  Pa.  St.  193. 

*  Story  on  Agency,  §  456  a. 

6  The  Maria,  1  W.  Rob.  Adm.  95 ;  Lucey  v.  Ingram,  6  M.  &  W.  302 ; 
The  Halley,  L.  R.  2  P.  C.  193.  But  if  the  master  still  remains  in  con- 
trol, although  compelled  to  avail  himself  of  the  assistance  of  a  pilot,  the 
shipowner  is  liable.  The  Guy  Mannering,  L.  R.  7  P.  D.  52;  The 
Agnes  Otto,  L.  R.  12  P.  D.  56;  The  Prins  Hendrik,  1899,  P.  177. 

'  Merchants'  Shipping  Act,  1894,  §  633,  replacing  §  388  of  Act  of 
1854. 


288  WHO   IS   A   SERVANT? 

Wliilc  it  has  been  held  by  tlio  Supreme  Court  of  the  United 
States  that  under  the  maritime  law  the  ship  is  liable  for  dam- 
ages occasioned  by  the  negligence  of  a  compulsory  pilot/  it 
has  recently  been  distinctly  held  that  in  an  action  at  common 
law  the  shipowner  is  not  liable  for  injuries  due  to  the  negli- 
gence of  a  pilot  accepted  compulsorily.^ 

§  236.     Status  of  one  compelled  to  serve. 

The  question  concerning  pilots  also  arises  when  the  pilot 
is  injured  through  the  negligence  of  a  member  of  the  crew. 
In  such  case  is  the  pilot  barred  of  recovery  upon  the  ground 
that  his  injury  is  due  to  the  negligence  of  a  fellow-servant  ? 
Where  the  statute  made  the  employment  of  the  pilot  com- 
pulsory and  also  compelled  the  pilot  to  serve,  and  also  fixed 
the  compensation,  and  further  provided  that  the  owner  should 
not  be  liable  for  the  pilot  as  for  a  servant,  it  was  held  that 
the  pilot  was  not  a  fellow-servant  of  the  crew  and  could 
recover  for  injuries  sustained  through  the  negligence  of  one 
of  them.^ 

If  a  convict  is  hired  out  by  the  state  to  an  employer,  there 
are  two  questions :  (1)  Is  the  employer  liable  as  master  for 
the  torts  of  such  convict  ?  (2)  Is  the  convict  a  servant 
within  the  meaning  of  the  fellow-servant  rule  ? 

Upon  the  first  point  there  would  seem  to  be  no  difficulty, 
since  the  employer  has  had  entire  freedom  of  choice  and  ought 
to  be  liable  for  the  act  of  the  convict  in  the  same  way  as  for 
the  act  of  any  other  servant.  He  is  also  liable  to  such  ser- 
vant for  defects  in  machinery  or  other  breach  of  his  duty  as 
master.* 

Upon  the  second  point  the  case  stands  upon  a  different 
basis.  The  convict  has  had  no  freedom  of  choice,  has  not 
chosen  his  master,  and  ought  not  to  be  held,  therefore,  to  have 

1  The  China,  7  Wall.  (U.  S.)  53 ;  Ralli  i'.  Troop,  157  U.  S.  386,  402  ; 
The  John  G.  Stevens,  170  U.  S.  113,  120;  The  Barnstable,  181  U.  S. 
464.     The  English  decisions  are  to  the  contrary. 

2  Homer  Ramsdell  Transportation  Co.  v.  La  Compaguie  Generale 
Transatlanlique,  21  S.  C.  Rep.  831. 

8  Smith  V.  Steele,  L.  R.  10  Q.  B.  125. 

*  Hartwig  v.  Bay  State,  &c.  Co.,  43  Hun  (N.  Y,),  425. 


COMPULSORY   EMPLOYMENT   OR   SERVICE.  289 

assumed  any  of  the  risks  connected  with  the  service.  He  is 
not  a  fellow-servant  of  free  employees  and  may  therefoi'e 
recover  for  injuries  occasioned  by  their  negligence.^  He  is 
not  free  to  refuse  obedience  to  any  command,  and  this  want 
of  freedom  of  action  may  negative  the  existence  of  contribu- 
tory negligence.^ 

§  237.     Parent  and  child. 

A  parent  is  liable  for  the  torts  of  his  minor  children  living 
with  him  only  when  he  would  be  liable  for  the  tort  of  a  con- 
tract servant  under  similar  circumstances  or  when  he  partici- 
pates in  the  tort  by  authorizing  or  ratifying  it.  There  is  no 
such  relation  existing  between  the  parent  and  child  as  will 
make  the  acts  of  the  child  any  more  binding  upon  the  parent 
than  the  acts  of  any  other  person.  Accordingly,  if  the  child 
commits  a  tort  not  in  the  course  of  the  parent's  affairs  and 
neither  authorized  nor  ratified  by  the  parent,  the  latter  is  not 
liable  for  the  consequences  of  such  act.^  Evidence  tending  to 
connect  the  parent  with  the  wrongful  act,  as  that  he  had 
acquiesced  in  former  similar  acts  of  the  child  upon  his  prem- 
ises, is  competent  and  should  be  received,'^  but  this  is  not  on 
the  ground  of  agency.  Since  an  unemancipated  minor  child 
can  have  no  action  against  his  parent  for  a  personal  tort,^  it 
follows  that  the  question  whether  a  minor  child  compelled  by 
law  to  serve  his  parent  is  a  fellow-servant  of  other  servants 
of  the  parent,  cannot  arise. 

§  .238.     Husband  and  -wife. 

The  common  law  liability  of  a  husband  for  his  wife's  torts 
did  not  rest  upon  the  doctrine  of  agency.  It  extended  to  a 
liability  for  ante-nuptial  torts  where  no  such  agency  could 
have  been  predicated.^     It  rested  upon  the  necessity  of  joining 

1  Buckalew  v.  Tennessee  Coal,  &c.  Co.,  112  Ala.  146;  Boswell  v.  Barn- 
hart,  96  Ga.  521. 

2  Dalheim  v.  Lemon,  45  Fed   Rep.  225,  233. 

8  Tifft  V.  Tifft,  4  Denio  (N.  Y),  175;  Paul  v.  Hummel,  43  Mo.  119  ; 
Brohl  V.  Lingeman,  41  Mich.  711 ;  Baker  v.  Morris,  33  Kans.  580. 
*  Hoverson  v.  Noker,  60  Wis.  511. 
6  Hewlett  V.  George,  68  Miss.  703. 
®  Hawk  V.  Harman,  5  Binney  (Pa.),  43. 

19 


290  WHO   IS   A   SERVANT? 

the  liiisbancl  in  all  actions  against  the  wife  and  upon  the  fact 
that  he  became  entitled  to  her  personalty  and  the  usufruct 
of  her  realty.  In  cases  where  he  was  not,  in  fact,  a  participant 
in  the  tort,  it  was  necessary  to  join  the  wife  in  the  action  ; 
but  where  the  tort  was  committed  in  the  husband's  presence 
and  by  his  command  or  encouragement,  he  could  be  sued 
alone.'  A  wife  could,  of  course,  be  a  servant  in  fact  and 
act  under  authority,  and  in  such  case  the  husband's  liability 
might  be  put  ui)on  the  ordinary  rule  of  agency. 

Modern  statutes  which  give  to  married  women  the  control 
and  benefit  of  their  own  property  and  enable  them  to  sue  or 
to  be  sued  alone,  have  greatly  modified  the  common  law 
doctrine  of  the  husband's  liability  for  his  wife's  torts. 

Since  a  husband  cannot  be  sued  by  his  wife  for  a  personal 
tort  during  the  marital  relation,  or  even  after  divorce  for  a 
personal  tort  committed  during  the  marital  relation,^  it  fol- 
lows that  the  question  whether  she  is  a  fellow-servant  of 
other  servants  of  the  husband,  cannot  well  arise. 

1  Angel  V.  Felton,  8  Johns.  (N.  Y.)  149;  Kosminsky  v.  Goldberg,  44 
Ark.  401. 

2  Phillips  V.  Barnet,  1  Q.  B.  D.  436 ;  Abbott  v.  Abbott,  67  Me.  304. 


SUB-SEEVANTS   AND   VOLUNTEERS.  291 


CHAPTER  XX. 

SUB-SERVANTS   AND   VOLUNTEERS. 
§  239.     Sub-servants.i 

It  is  generally  conceded  that,  aside  from  the  cases  of  com- 
pulsory employment  or  compulsory  service  just  considered, 
one  is  free  to  select  his  own  servants,  and  that  in  order  to 
create  the  relation  it  is  necessary  to  have  the  consent  of  both 
parties,  express  or  implied.  Where,  therefore,  one  servant 
employs  a  sub-servant  to  assist  liim  in  the  master's  business, 
the  sub-servant  does  not  become  the  servant  of  the  master 
unless  the  first  servant  had  authority  to  employ  the  sub- 
servant  or  unless  such  employment  was  ratified  by  the  master.^ 
Whether  such  authority  may  be  derived  from  necessity  has 
already  been  considered.^  It  has  also  been  pointed  out  that 
one  may  be  liable  for  the  consequences  of  the  acts  or  omis- 
sions of  those  who  are  not  his  servants  at  all  upon  the  doc- 
trine that  "  where  a  man  is  in  possession  of  fixed  property, 
he  must  take  care  that  it  is  so  used  and  managed  by  those 
whom  he  brings  upon  the  premises  as  not  to  be  dangerous 
to  others.  In  that  view  he  is  held  liable,  not  for  the  negli- 
gence of  another,  but  for  his  own  personal  negligence  in  not 
preventing  or  abating  a  nuisance  on  his  own  premises."  * 
It  should  also  be  noted  that  where  a  servant  employs  a 
sub-servant,  liability  may  attach  to  the  master,  not  for  the 
mere  negligence  of  the  sub-servant,  but  for  the  concurring 
negligence  of  the  servant  himself  in  intrusting  the  business 

1  See  ante,  §§  92-95. 

2  Haluptzok  V.  Great  Northern  Ry.,  55  IMinn.  446. 
8  Ante,  §  59 ;  Gwilliara  v.  Twist,  1895,  2  Q.  B.  84. 

*  Mitchell,  J.,  in  Haluptzok  v.  Great  Northern  Ry. ,  supra.  Perhaps 
Bush  V.  Stelnman,  1  Bos.  &  P.,  404,  and  Althorf  v.  Wolfe,  22  N.  Y.  355, 
may  be  supported  on  this  theory,  though  both  cases  have  been  much  dis- 
cussed and  criticised. 


292  WHO   IS   A   SERVANT  ? 

to  the  sub-servant  or  in  failing  to  use  due  care  to  conduct  it 
himself.^  In  Althorf  v.  Wolft\^  a  servant  who  had  been 
directed  to  remove  the  ice  and  snow  from  the  roof  of  his 
master's  house,  secured  a  friend  to  assist  him,  and,  while 
both  were  so  engaged,  a  passer-by  was  struck  by  the  falling 
ice  and  killed.  It  was  held  that  the  owner  (master)  was 
liable  whether  the  ice  that  occasioned  the  injury  was  thrown 
by  the  servant  or  his  friend.  The  reasons  given  are  diverse, 
and  the  decision  may  rest  upon  the  idea  of  implied  authority, 
or  of  ratification  (of  which  there  was  some  evidence),  or  of 
the  negligence  of  the  servant  in  directing  or  controlling  the 
work,  or  of  the  duty  of  the  occupier  of  premises  not  to  permit 
his  i)roperty  to  become  a  nuisance- 
Whatever  other  grounds  of  liability  may  exist,  it  is  clear 
upon  princij)le  that  the  master  is  not  liable  as  master  unless 
the  sub-servant  has  been  engaged  with  his  consent,  express 
or  implied,  or  unless  he  has  ratified  the  engagement,  or  un- 
less there  be  established  a  case  of  necessity  which  may,  after 
all,  be  taken  to  be  merely  a  case  of  the  enlargement  of  the 
authority  because  of  the  necessity.^ 

§  240.     Volunteers. 

A  volunteer  is  one  who,  without  the  request  or  consent  of 
M  or  his  authorized  agent,  undertakes  to  perform  a  service 
for  M.  This  may  be  as  a  mere  interloper  or  it  may  be  in 
order  to  advance  some  interest  of  the  volunteer  or  of  his 
master.  In  the  first  case  the  volunteer  is  essentially  a  tres- 
passer, or  at  most  a  licensee,  and  his  acts  cannot  bind  M,* 
nor  can  he  recover  for  any  injury  he  may  suffer  while  in  the 
voluntary  service.^  It  is  immaterial  that  he  may  have  been 
requested  to  assist  by  a  servant  of  M,  provided  the  servant 
had  no  authority  to  engage  assistants.^     Such  request  may 

»  Booth  I'.  Mister,  7  Car.  &  P.  66 ;  Althorf  v.  Wolfe,  22  N.  Y.  355; 
Engelhart  v.  Farrant,  1S97,  1  Q.  B.  240. 
^  22  N.  Y.  3.35. 
8  Gwilliam  v.  Twist,  supra. 

*  Ante,  §  239. 

B  Church  V.  Chicago,  &c.  Ry.,  50  Minn.  218. 

•  Church  V.  Chicago,  &c.  Ry.,  supra. 


SUB-SERVANTS   AND   VOLUNTEERS.  293 

save  the  volunteer  from  being  regarded  as  a  trespasser,  but 
he  still  assumes  all  the  risks  of  the  temporary  service,  except 
that  he  does  not  assume  the  risk  of  the  wanton  injury,  or  an 
injury  recklessly  inflicted  after  knowledge  of  his  dangerous 
situation.^ 

If,  however,  the  volunteer  performs  the  service  at  the 
request  of  M's  servants,  but  not  for  M's  benefit  primarily, 
but  to  expedite  his  own  or  his  master's  business,  he  is  not 
a  trespasser  and  does  not  assume  the  risks,  and  may  recover 
if  negligently  injured.^  In  such  case  the  volunteer  is  not 
M's  servant  so  as  to  render  M  liable  for  his  negligence ;  on 
the  other  hand  he  is  in  the  position  of  any  third  person  in- 
jured by  M's  servants. 

In  case  the  volunteer  renders  a  beneficial  service  for  the 
alleged  master,  in  his  presence  or  with  his  knowledge,  and 
is  suffered  to  proceed  without  dissent,  an  assent  may  be 
implied  and  the  relation  of  master  and  servant  established 
to  an  extent  necessary  to  render  the  master  liable  to  third 
persons  for  the  tortious  acts  of  the  volunteer  done  in  the 
course  of  such  service.^ 

1  Evarts  v.  St.  Paul,  &c.  Ry.,  56  Minn.  141. 

2  Easou  V.  S.  &  E.  T.  Ry.,  65  Tex.  577 ;  Street  Ry.  v.  Bolton,  43  Oh. 
St.  224  ;  Welch  v.  Maine  Cent.  R.,  86  Me.  552. 

8  HUl  V.  Morey,  26  Vt.  178. 


PART  II. 

LIABILITY  OF  MASTER  FOR  TORTS  AND  CRIMES  OF 
SERVANT. 

§  241.     Introductory. 

The  main  object  of  the  relation  of  master  and  servant  is 
that  the  servant  shall  perform  operative  acts  for  the  master. 
In  so  doing  the  servant  may  wilfully  or  negligently  injure 
the  person  or  property  of  some  third  person.  To  determine 
the  grounds  of  liability  in  such  a  case,  together  with  the 
extent  and  limits  of  liability,  is  one  of  the  problems  we  have 
now  to  consider.  We  have  also  to  consider  whether  the 
liability  is  the  same  in  case  the  employer  is  a  public  political 
entity  like  a  state  or  city,  or  is  a  i)ublic  charity.  The  ser- 
vant may,  while  about  his  master's  business,  commit  a  crime, 
and  we  liave  also  to  inquire  whether  the  master  can  be  held 
liable  in  a  criminal  prosecution  for  such  offence. 


LIABILITY   OF   MASTER   FOR   TORTS   OF   SERVANT.  295 


CHAPTER  XXI. 

LIABILITY   OF  MASTER  TO   THIRD   PERSONS   FOR   TORTS  OP 
SERVANT. 

§  242.     Conditions  of  liability. 

In  order  that  a  master  shall  be  held  liable  to  third  persons 
for  torts  committed  by  his  servant  resulting  in  injury  to 
them,  it  must  appear : 

(I.)  That  the  wrongdoer  was  in  fact  the  servant  of  the  one 
sought  to  be  charged  with  liability  ; 

(II.)  That  the  servant  was  at  the  time  of  the  commission 
of  the  tort  about  his  master's  business ; 

(III.)  That  the  servant  was  acting  within  the  course  of 
his  employment ; 

(IV.)  If  the  tort  was  wilful,  either  (1)  that  the  servant 
was  acting  within  the  course  of  the  employment  and  in  the 
furtherance  of  it,  or  (2)  that  the  master  had  voluntarily  un- 
dertaken toward  the  injured  party  the  particular  obligation 
broken  by  the  servant  and  had  intrusted  the  performance  of 
the  obligation  to  the  servant  who  committed  the  breach  of 
it,  or  (3)  that  the  master  had  intrusted  the  servant  with 
such  dangerous  instrumentalities  that  the  risk  of  their  wilful 
misuse  ought  to  rest  upon  the  master. 

§  243.     (I.)     The  "wrongdoer  must  be  defendant's  servant. 

The  doctrine  of  respondeat  superior  rests  upon  the  relation 
of  master  and  servant.  It  must  therefore  appear  that  such  a 
relation  does  in  fact  exist.  It  does  not  exist  merely  because 
of  the  relation  of  parent  and  child,^  husband  and  wife,^  or 
employer  and  employee.^    It  may  be  that  the  wrongdoer  was 

1  See  ante,  §  237.  2  gee  ante,  §  238. 

8  See  ante,  §  217. 


296  LIAIJILITV    OF    MASTER 

an  independent  contractor,^  or  a  volunteer,^  in  which  case,  sub- 
ject to  the  qualifications  liereinbcforc  mentioned,  the  employer 
is  not  liable  for  the  torts  of  such  persons.  It  may  be  that  the 
one  sought  to  be  charged  has  been  compelled  by  law  to  employ 
the  wrongdoer.^  It  may  be  that  the  employer  is  a  public 
entity  or  officer  or  public  charity.*  Or  it  may  be  that  while 
the  wrongdoer  is  the  general  servant  of  the  one  sought  to  be 
charged  there  has  been  such  a  temi)orary  ti-ansfer  of  service 
to  another  as  to  render  the  wrongdoer  the  servant  for  the  time 
being  of  the  transferee.^  In  all  these  and  other  cases  the 
question  becomes  a  vital  one  whctlicr  the  one  sought  to  be 
charged  is  in  fact  the  responsil)le  master  of  the  wrong- 
doer. 

In  some  cases  there  may  be  a  presumption  that  the  wrong- 
doer was  the  servant  of  the  one  sought  to  be  charged.  If  the 
latter  is  the  owner  of  a  vehicle  which,  by  negligent  manage- 
ment, has  been  the  cause  of  injury  to  another,  there  is  a  pre- 
sumption that  the  one  in  charge  of  the  vehicle  was  the 
servant  of  the  owner,  and  the  latter  has  the  burden  of  show- 
ing that  the  relation  did  not  exist.^  The  old  notion  ^  that  if 
the  owner  sent  a  vehicle  out  with  his  name  upon  it  he  was 
estopi)ed  to  deny  that  the  driver  was  his  servant,  has  been 
distinctly  repudiated.^ 

There  are  few  cases  in  wliich  estoppel  plays  any  part  in 
the  law  of  master  and  servant.  Yet  one  may  be  estopped  to 
deny  that  another  is  his  servant  where  by  so  representing  him 
thii-d  persons  have  been  induced  to  intrust  their  person  or 
property  to  his  care  or   treatment.^ 

1  See  ante,  §  218  et  seq.  «  See  ante,  §  240. 

8  See  ante,  §  235.  *  See  post,  §  257  et  seq. 

6  See  ante,  §  228  et  seq. 

«  Nonis  V.  Kohler,  41  N.  Y.  42;  Svenson  v.  Atlantic  Mail  Steamship 
Co.,  57  N.  Y.  108. 

7  See  Stables  r.  Eley,  1  C.  &  P.  014. 

8  Smith  V.  Bailey,  1891,  2  Q.  B.  403. 

«  Ilamion  v.  Siegel-Cooper  Co.,  107  N.  Y.  244.  Defemlants  represent 
that  they  conduct  a  dentistry  establishment.  Plaintiff  is  treated  there  by 
S.  In  an  action  against  defendants  for  injuries  resulting  from  S's  unskil- 
ful treatment,  it  is  held  that  defendants  are  estopped  to  deny  that  S  is 
their  servant,  or  to  show  that  S  is  an  independent  contractor. 


FOR   TORTS   OF   SERVANT.  297 

§  244.     (II.)     The  servant  must  be  about  his  master's  business. 

Obviously  one  may  be  in  the  general  service  of  another  and 
yet  at  times  attend  to  business  or  pleasure  for  himself.  Acts 
done  during  the  time  the  servant  is  at  liberty  cannot  render 
the  master  liable.  A  master  may  lend  his  horse  and  vehicle 
to  a  servant  and  give  the  servant  his  liberty,  and  during  the 
time  that  the  servant  is  using  the  horse  and  vehicle  for  his 
own  ends  the  master  is  not  liable  for  the  servant's  negligence.^ 
Nor  is  he  liable  if  the  servant  without  his  consent  takes  the 
horse  and  vehicle  for  ends  of  his  own.^  But  if  the  servant 
while  about  his  master's  business  makes  a  slight  deviation  for 
ends  of  his  own  the  master  remains  liable,  as,  where  the  ser- 
vant drives  out  of  the  most  direct  route  for  personal  ends,^ 
or  where  a  pilot  diverges  from  the  direct  course  for  ends  not 
connected  with  his  master's  business."* 

"  In  such  cases  it  is,  and  must  usually  remain,  a  question 
depending  upon  the  degree  of  deviation  and  all  the  attendant 
circumstances.  In  cases  where  the  deviation  is  slight  and  not 
unusual,  the  court  may,  and  often  will,  as  matter  of  law,  de- 
termine that  the  servant  was  still  executing  his  master's  busi- 
ness. So,  too,  where  the  deviation  is  very  marked  and  unusual, 
the  court  in  like  manner  may  determine  that  the  servant  was 
not  on  the  master's  business  at  all,  but  on  his  own.  Cases 
falling  between  these  extremes  will  be  regarded  as  involving 
merely  a  question  of  fact,  to  be  left  to  the  jury  or  other  trier 
of  such  questions."  ^ 

Railway  workmen  who  build  a  fire  in  order  to  heat  coffee 
for  their  dinner  are  not  acting  for  the  railway,  and  the  latter 
is  not  liable  unless  it  be  the  duty  of  such  workmen  to  guard 

1  Bard  v.  Yohii,  26  Pa.  St.  482;  Maddox  v.  Brown,  71  Me.  432) 
Campbell  v.  Providence,  9  R.  I.  262. 

3  Mitchell  V.  Crassweller,  13  C.  B.  237  ;  Stone  r.  Hills,  45  Conn.  44; 
Fiske  V.  Enders  (Conn.),  47  Atl.  681;  Storry  r.  Ashton,  L.  R.  4  Q.'B. 
476;  Cousins  i'.  Hannibal,  &c.  R.,  66  Mo.  572. 

8  Joel  V.  Morison,  6  C.  &  P.  501  ;  Sleath  v.  Wilson,  9  C.  &  P.  607; 
Patten  v.  Rea,  2  C.  B.  n.  s.  606;  Mulvehill  v.  Bates,  31  Minn.  364; 
Ritchie  v.  Waller,  63  Conn.  155. 

*  Quinn  v.  Power,  87  N.  Y.  535. 

6  Ritchie  v.  Waller,  63  Conn.  155, 161. 


298  LIABILITY   OF   MASTER 

against  fire;^  in  the  latter  case  it  would  seem  that  tlic  negli- 
gence in  not  extinguishing  it  would  be  the  negligence  of  the 
master.^ 

§  245.     (Ill)     The  servant   must  be  acting  within  the    course    of 
his  employment. 

Subject  to  the  possible  exceptions  to  be  hereafter  mentioned,^ 
the  master  is  liable  for  the  torts  of  his  servant  only  when  the 
servant's  act  or  omission  is  within  the  course  of  his  employ- 
ment.'* The  mere  fact  that  the  servant  is  in  the  employment 
of  the  master  is,  of  course,  never  sufficient  to  charge  the  mas- 
ter with  the  consequences  of  the  servant's  misconduct.*'  It 
must  further  appear  that  the  act  or  omission  constituting  the 
misconduct  was  expressly  or  impliedly  within  the  scope  or 
course  of  the  servant's  employment.*' 

This  is  essentially  a  question  of  fact,  and  the  decision  of  it 
may  rest  upon  any  one  or  more  of  several  considerations. 
First,  the  particular  act  may  be  expressly  authorized  by  the 
master,  in  which  case  there  would  be  no  doubt  that  it  is  one 
of  the  ends  to  be  accomplished  by  the  employment."  Second, 
it  may  be  ratified  by  the  master,  in  which  case  it  stands  upon 
the  same  footing  as  an  act  previously  authorized.^  Third,  it 
may  be  an  act  which  the  master  reasonably  led  his  servant  to 
believe  was  authorized,  although  in  fact  the  master  never 
intended  to  authorize  such  an  act,  in  which  case  the  master  is 
liable.^  Fourth,  it  may  be  an  act  incidental  to  the  duties 
actually  prescribed  or  one  which  servants  employed  in  a 
similar  capacity  usually  have  power  to  do,  in  which  case  it 

i  Moiier  r.  St.  Paul,  &c.  R.,  31  Minn.  351. 

2  Chapman  v.  N.  Y.   Cent.,  &c.  K.,  33  N.  Y.  369. 

«  See  post,  §§  252-254. 

*  See  ante,  §  148  et  seq. 

6  Aldrich  r.  Boston  &  Worcester  R. ,  100  Mass.  31;  Walton  f.  N.  Y. 
&c.  Co.,  139  Mass.  550;  Wiltse  r.  State  Bridge  Co.,  63  Mich.  639. 

«  Burns  v.  Poulsom,  L.  R.  8  C.  P.  563. 

T  Blackstone,  Coram.  I.,  429-430;  post,  §  246. 

»  Dempsey  v.  Chambers,  154  Mass.  330;  Niras  v.  Mt.  Ilermon  School, 
160  Mass.  177 ;  post,  §  247. 

9  May  lu  Bliss,  22  Vt.  477 ;  Moir  v.  Hopkins,  16  111.  313 }  post,  §  248. 


FOR   TORTS   OF   SERVANT.  299 

will  be  presumed  that  the  particular  servant  in  question  has 
been  authorized  to  do  it.^  Fifth,  it  may  be  an  act  which  the 
servant  performs  in  the  course  of  the  business  intrusted  to 
him  by  the  master  and  intended  by  the  servant  to  be  for  the 
master's  benefit,  in  which  case  it  will  be  held  to  be  within  the 
scope  of  the  employment,  although  the  master  never  author- 
ized or  intended  to  authorize  it.^  Sixth,  it  may  be  an  act  not 
authorized  or  ratified,  done  by  the  servant  while  about  the 
master's  business  but  not  intended  for  the  master's  benefit,  in 
wliich  case  the  master  is  not  usually  liable.^  The  last  case  put 
involves,  however,  further  questions  of  considerable  nicety 
which  will  be  treated  hereafter.* 

Although  the  immediate  cause  of  the  injury  may  be  the  act 
of  a  servant  who  is  outside  the  scope  of  his  employment,  a  pre- 
cedent and  proximate  cause  may  be  the  negligence  of  a  ser- 
vant who  is  within  the  scope  of  the  employment.  Thus  where 
the  master  intrusts  the  driving  of  a  van  to  A  and  the  delivery 
of  parcels  from  it  to  B  with  instructions  that  A  is  forbidden  to 
leave  the  van  and  B  is  forbidden  to  drive  it,  and  A  does  leave 
the  van  and  B  drives  it  and  injuries  a  person,  the  master  is 
liable,  not  for  the  negligence  of  B,  for  he  is  outside  the  scope 
of  his  employment,  but  for  the  negligence  of  A  in  leaving  the 
van  unattended.^ 

§  246.  —  (1)  Acts  commanded  by  master. 

If  one  commands  another  to  commit  a  tort  he  becomes 
thereby  a  party  to  the  tort  and  liable  as  a  tort-feasor  to  the  in- 
jured party .^  This  does  not  rest  necessarily  upon  any  relation 
of  master  or  servant  but  upon  the  notion  that  the  one  directing 

1  West  Jersey  &  Seashore  R.  v.  Welsh,  62  N.  J.  L.  655 ;  post,  §  249. 

2  Burns  v.  Poulsom,  L.  R.  2  C.  P.  563  ;  Evans  v.  Davidson,  53  Md. 
245 ;  Pahneri  v.  Metropolitan  Ry.,  133  N.  Y.  261 ;  post,  §  250. 

«  Bowler  v.  O'Connell,  162  Mass.  319;  Mulligan  y.  New  York,  &c.  Ry., 
129  N.  Y.  506 ;  post,  §  251. 

*  See  post,  §§252-254;  ante,  §§  151-157. 

6  Engelhart  v.  Farrant,  1897,  1  Q.  B.  240 ;  Williams  v.  Koehler,  41 
App.  Div.  (N.  Y.)  426. 

«  Hen-ing  v.  Iloppock,  15  N.  Y.  409  ;  Dyett  v.  Hyman,  129  N.  Y.  351. 
For  early  cases  on  particular  command,  see  7  Harv.  L.  Rev.  384  et  seq. 


300  LIABILITY   OF   MASTER 

tlic  wrong  is  a  participant  in  it,  and  he  and  the  servant  may 
be  sued  jointly  in  trespass.^  In  such  case  it  is  not  necessary 
tliat  the  sj)cciric  act  should  be  commanded  ;  it  is  enough  that 
the  master  has  directed  his  servant  generally  to  use  force,  or 
to  commit  a  trespass,  or  to  do  any  similar  act  under  given  cir- 
cumstances, and  that  the  servant  in  carrying  out  these  instruc- 
tions has  committed  the  tort  complained  of.^  Even  where  the 
master  commands  a  lawful  act  but  the  servant  by  mistake  does 
an  unlawful  one,  the  master  may  be  held  liable  for  the  tres- 
pass.^ The  cases  of  an  express  command  to  do  an  unlawful 
act  shade  imperceptibly  into  the  cases  where  the  command  is  to 
conduct  a  certain  businesG  for  the  master  and  the  question  is 
whether  the  particular  wrongful  act  is  within  the  course  of  the 
employment.*  Thus  the  acts  of  conductors  or  other  trainmen 
in  expelling  trespassers  from  railway  trains  may  be  treated 
as  the  execution  of  a  command  or  as  the  natural  incident  of 
the  particular  employment,^ 

If  a  master  is  liable  in  trespass  for  an  unlawful  assault  or 
entry  he  is  liable  only  for  the  natural  consequences.  Thus  if 
he  commands  his  servant  to  break  and  enter  another's  prem- 
ises for  a  particular  purpose,  he  is  not  liable  if  the  servant 
steals  personal  property  while  there.® 

§  247. —  (2)  Acts  ratified  by  master. 

The  doctrine  of  ratification  has  already  been  fully  treated.' 
So  far  as  concerns  the  ratification  of  torts  it  may  be  added 
that  there  is  a  question  whether  a  merely  personal  tort,  stand- 
ing alone,  can  be  ratified  so  as  to  make  the  one  ratifying  it 
a  trespasser  ah  initio.^     The  question,  however,  does  not  usu- 

1  Hewett  V.  Swift,  3  Allen  (Mass.),  420;  Smith  v.  Webster,  23  Mich. 
298;  Ketcham  v.  Newman,  141  N.  Y.  205. 

2  Tbid.j  Barden  v.  Felch,  109  Mass.  154. 

«  Maier  v.  Randolph,  33  Kans.  340 ;  May  v.  Bliss,  22  Vt.  477 ;  Moir  v. 
Hopkins,  16  111.  313. 

*  AVigmore,  7  Ilarv.  L.  Rev.,  p.  399  et  seq. 

6  Rounds  V.  Delaware,  &c.  R.,  64  N.  Y.  129;  Illinois  Central  R.  v, 
Latham,  72  Miss.  32. 

«  Searle  v.  Parke,  68  N.  H.  311.  »  Ante,  §§  30-49. 

8  Adams  v.  Freeman,  9  Johns.  (N.  Y.)  117 ;  Dempsey  v.  Chambers, 
154  Mass.  330,  333. 


FOR   TORTS    OF   SI'RYANT.  301 

ally  come  up  in  that  form.  It  arises  when  a  master  wishing 
to  take  advantage  of  an  unauthorized  act  of  his  servant, 
ratifies  the  act  and  accepts  its  benefits,  and  is  then  sought  to 
be  charged  with  some  tort  committed  by  the  servant  in  the 
performance  of  it.^  Thus  a  teamster  without  authority  deliv- 
ered for  defendant  a  load  of  coal  ordered  by  plaintiff,  and  in 
so  doing  broke  plaintiff's  plate-glass  windows.  Defendant 
ratified  the  act  of  delivery  and  it  was  held  that  he  thereby 
became  liable  for  the  tort  connected  with  it.^  "  Tlie  defend- 
ant's ratification  of  the  employment  established  the  relation 
of  master  and  servant  from  the  beginning  with  all  its  inci- 
dents, including  the  anomalous  liability  for  his  negligent  acts." 
In  other  words,  if  the  defendant  had  engaged  the  teamster  to 
deliver  the  coal  he  would  have  been  liable  for  the  negligence 
connected  with  the  employment :  so,  also,  when  he  ratified  the 
unauthorized  act.     To  the  same  effect  are  other  cascs.^ 

If  a  servant  commit  an  assault  or  other  wrong  while  in  the 
master's  employment  it  is  not  a  ratification  of  the  tort  merely 
to  continue  the  servant  in  the  employment.* 

Acquiescence  in  the  continuing  negligent  or  wilful  conduct 
of  a  servant  may  render  the  master  liable,  as  acquiescence 
in  a  custom  of  workmen  to  throw  off  fire-wood  from  a  con- 
struction train  for  their  own  private  use,°  or  in  a  custom  of 
cash-boys  to  snap  pins  for  their  amusement.^ 

§  248.  —  (3)  Acts  which  master  reasonably  led  servant  to  believe 
■were  authorized. 
The   master  may  by  his   instructions  lead    a  servant   to 
believe   that  certain  powers  are  intrusted  to  him.     In  such 

^  "  Acceptance  of  benefits  "  by  the  principal  or  master  is,  at  least,  the 
best  evidence  of  ratification,  and  may,  historically,  have  been  the  origin 
of  the  doctrine.     Arite,  §§  34,  121  ;  7  Harv.  L.  Rev.  p.  387-388,  note. 

2  Dempsey  v.  Chambers,  15-i  Mass.  330. 

8  Niras  V.  Mt.  Hermon  Boys'  School,  160  Mass.  177;  Lee  v.  Lord,  76 
Wis.  582. 

"  Williams  v.  Pullman  Palace  Car  Co.,  40  La.  An.  87 ;  Gulf,  &c.  Ry. 
V.  Kirkbride,  79  Tex.  457;  Donivan  v.  Manhattan  Ry.,  1  Misc.  (N.  Y.) 
368. 

6  Fletcher  v.  Baltimore  &  Potomac  R.,  168  U.  S.  13.5. 

«  Swinarton  v.  Le  Boutillier,  7  Misc.  (N.  Y.)  639,  aff'd,  U8N.Y.752. 


302  LTABILITY    OF    MASTER 

a  case,  if  this  conclusion  is  one  reasonably  reached  by  the 
servant,  the  acts  of  the  latter  within  the  limits  of  the  sup- 
posed authority  will  bind  the  master.  Thus,  if  the  master 
instructs  the  servant  to  go  to  a  certain  field  and  kill  a 
beef,  and  the  servant  kills  by  mistake  the  animal  of  X, 
believing  it  to  be  the  one  meant  by  the  master,  the  latter 
is  liable  for  the  trespass.^  If  the  master  tells  the  servant 
to  take  from  a  mill-yard  such  lumber  as  the  mill-owner 
may  point  out  as  belonging  to  the  master  and  the  mill- 
owner  points  out  lumber  belonging  to  X  and  the  servant 
takes  it  away,  the  master  is  liable.^  If  the  master  tells  the 
servant  to  go  and  get  X's  team  and  the  servant  takes  the  team 
without  X's  consent  and  injures  it,  the  master  is  liable.^  In 
all  of  these  cases  the  master  intended  something  different 
from  the  result  actually  accomplished,  but  the  servant  acted 
upon  the  instructions  as  he  reasonably  understood  them,  and 
the  master  is  bound  by  the  act  so  performed  within  the 
scope  of  the  employment  and  the  instructions  as  nndci'stood. 
Although  the  master  intended  that  his  animal  and  not  X's 
should  be  killed,  that  his  lumber  and  not  X's  should  be  taken, 
and  that  X's  team  should  be  taken  only  with  X's  consent,  yet 
if  the  servant  reasonably  believed  that  he  was  acting  within 
his  instructions,  the  master  must  bear  the  loss  occasioned 
by  the  error. 

§  249.  —  (4)  Acts  impliedly  authorized. 

In  addition  to  the  acts  expressly  commanded  or  authorized, 
there  are  others  which  may  fairly  be  implied  as  necessary  or 
usually  incidental  to  those  actually  authorized.*  Frequently 
the  whole  problem  of  whether  a  given  act  is  within  the  course 
or  scope  of  the  employment  hinges  upon  this  consideration. 

1  Maier  v.  Randolph,  33  Kans.  340. 

2  May  V.  Bliss,  22  Yt.  477. 

8  Moir  r.  Hopkins,  IG  HI.  313. 

*  Professor  Wigmore  has  shown  liow,  in  the  English  law,  the  modern 
doctrine  of  "  the  course  of  the  employment  "  grew  out  of  the  earlier  doc- 
trine of  an  implied  command,  7  Harv.  L.  Rev.  383.  "  Whatever  a  servant 
is  permitted  to  do  in  the  usual  course  of  his  business  is  equivalent  to  a 
general  command."    Blackstone,  Comm.  I.  430. 


FOR   TORTS    OF    SKRVANT.  303 

Thus  where  a  booking  clerk  of  a  railway  company  had  caused 
the  arrest  of  a  person  who  he  thought  had  been  attempting 
to  rob  the  till,  the  liability  of  the  master  was  made  to  depend 
upon  the  answer  to  the  inquiry  whether  the  arrest  was  a 
necessary  means  of  protecting  the  property  committed  to  the 
servant's  care.^  So  in  a  case  where  trainmen  with  excessive 
or  improper  force  remove  trespassers  from  the  trains,  the 
liability  of  the  company  rests  upon  the  implied  authority 
given  to  trainmen  to  protect  the  property  under  their  care 
from  such  trespassers.^  To  some  extcut  this  authority  may 
also  be  said  to  rest  upon  custom  or  usage.^  In  general, 
whatever  are  the  customary  powers  of  servants  in  like  occu- 
pations or  whatever  powers  are  reasonably  incidental  to  those 
actually  conferred,  will  be  inferentially  the  powers  of  the 
servant  in  question.  Even  an  express  grant  of  the  particu- 
lar power  to  another  servant  may  not  be  sufhcient  to  rebut 
the  inference  that  such  implied  power  is  incidental  to  the 
occupation.'* 

The  distinction  between  an  express  authority  and  an  implied 
authority  is  clearly  brought  out  in  the  cases  dealing  with  the 
authority  of  railway  trainmen  to  remove  trespassers  from 
their  trains.  It  is  usual  for  railway  companies  to  confer 
upon  conductors  or  other  trainmen  an  express  authority  to 
remove  trespassers,  and  when  such  authority  is  exercised 
there  is  no  doubt  whatever  that  the  conductor  is  doing  an  act 
within  the  course  of  his  employment.^  If,  however,  a  tres- 
passer is  removed  by  a  brakeman  there  may  be  no  such 
express  authority,  and  the  question  arises  whether  there  is  an 
implied  authority.  If  no  express  authority  has  been  conferred 
upon  a  particular  trainman  then  there  is  an  implied  authority 
for  any  trainman  to  remove  the  trespasser  since  the  confiding 
of  the  care  of  the  property  to  servants  carries  with  it  an 
implied  authority  to  do  any  act  reasonably  necessary  for  its 

1  Allen  V.  London,  &c.  Ry.,  L.  R.  6  Q.  B.  65. 

2  West  Jersey  &  Seashore  R.  v.  Welsh,  62  N.  J.  L.  655. 
8  Ibid.     Hoffman  v.  R.  Co.,  87  N.  Y.  25. 

*  Ibid. 

6  Illinois  Cent.  R.  v.  King,  179  111.  91. 


304  LIAP.ILITY   OF   MASTER 

protection.^  If  express  authority  has  been  given  to  a  particu- 
lar trainman,  as  the  conductor,  will  there  still  be  an  implied 
authority  in  other  trainmen  ?  It  has  been  held  that  there 
will.  "  When  the  company  committed  to  the  conductor  and 
his  crew  of  brakemen  the  custody  and  care  of  its  freight 
train,  and  thereby  gave  implied  power  to  exclude  and  expel 
therefrom  any  unauthorized  persons  intruding  thereon  in 
contravention  of  the  design  and  purpose  of  the  com{)any  in 
running  such  a  train,  I  think  that  the  implication  is  not 
rebutted  by  proof  that  it  had  selected  one  of  its  servants  and 
given  him  express  authority  in  respect  of  such  trespassers. 
The  express  grant  is  not  inconsistent  with  the  implied  author- 
ity." 2  But  if  the  express  authority  is  given  to  one  servant, 
and  is  expressly  forbidden  to  all  others,  the  oj)inion  has  been 
expressed  that,  as  to  trespassers  at  least,  the  presumption  that 
the  others  had  an  implied  authority  would  be  rebutted.^ 

It  is  to  be  noted  that  these  cases  cannot  proceed  upon  the 
doctrines  of  estoppel  since  no  one  is  misled  to  his  damage 
by  the  appearance  of  authority.^  The  primary  (juestion  is 
whether  the  servant  is  acting  in  "  the  course  of  the  employ- 
ment," and  in  answering  this  it  is  proper  to  take  account  of 
any  implied  authority  to  act  as  he  did. 

§  250.  —  (5)    Acts  for  master  "a  benefit. 

A  negligent  act  is  not  ordiuai-ily  intentional  and  the  dam- 
age is  inadvertent.  Hence  in  negligence  cases  the  inquiry 
rarely  proceeds  beyond  the  problem  whether  the  act  or  omis- 
sion was  in  the  course  of  the  employment.  In  wilful  torts, 
however,  the  damage  is  advertent  and  the  inquiry  is  directed 
to  the  additional  ])oint  whether  the  act  was  intended  for  the 
master's  benefit.  If  so  intended  by  a  servant  in  the  course  of 
liis  employment  the  master  is  liable.^     It  is  conceivable  that 

1  Hoffman  v.  X.  Y.  Cent,  &c.  K,.,  87  N.  Y.  25.  Contra,  International, 
&c.  Ry.  V.  Anderson,  82  Tex.  516;  Chicago,  &c.  11.  v.  Brackman,  78  111. 
Ajip.  141,  and  cases  cited. 

^  West  Jersey  &  Seashore  R.  v.  Welsh,  62  N.  J.  L.  635,  663. 

8  Brevig  v.  Chicago,  &c.  II.,  64  Minn.  168,  174-175. 

*  A  nte,  §§  .5,  52  a. 

6  Poxt.  §  252. 


Q^K  ©  ^~;^(0-^,^^•c^- 


FOR   TORTS   OF   SERVANT.  305 

a  sei'vant  may  intend  to  be  negligent,  that  is  he  may  know 
that  he  is  not  using  the  care  proportioned  to  the  circum- 
stances, without  intending  to  produce  damage  thereby.  In 
such  a  case  the  inquiry  may  be  proper  whether  the  servant 
intended  to  further  his  master's,  or  his  own,  interests  by  such 
wilful  departure  from  the  standard  of  care.^  It  is  clearly  the 
law  that  all  acts  done  by  the  servant  in  the  course  of  the 
employment  and  in  the  furtherance  of  it,  that  is  supposedly 
for  the  master's  benefit,  will,  if  they  result  in  damage  to  third 
persons,  render  the  master  liable.^ 

§  251.  —  (6)    Acts  for  servant's  benefit. 

Whore  an  act  is  clearly  for  the  servant's  benefit  the  negli-  ^ 
gent  performance  of  it  resulting  in  injury  to  a  third  person 
will  not  render  the  master  liable,  because,  in  such  case,  the 
servant  is  outside  the  course  of  the  employment.^  But  where 
the  act  is  so  closely  connected  with  the  master's  affairs  that, 
though  the  servant  may  derive  some  benefit  from  it,  it  may 
,  fairly  be  regarded  as  within  the  course  of  the  employment, 
the  master  will  be  liable.* 

In  case  of  wilful  torts  it  is  said  that  if  the  tort  is  not  for 
the  master's  benefit,  the  master  will  not  be  liable,^  but  this  is 
subject  to  exceptions  and  qualifications  heretofore  ^  and  here- 
after'^ noted.  ^ 

§  252.     (IV.)    Wilful   or    malicious    torts  :     (1)   in   furtherance    of 
the  employment. 

In  the  case  of  wilful  or  malicious  torts  it  is  easier  to  estab- 
lish  that  the  servant  has  departed  from  the  course   of   his 

1  Philadelphia  &  Reading  R.  v.  Derby,  14  IIow.  (U.  S.)  468  ;  Weed  u. 
Panama  R.,  17  N.  Y.  362. 

2  Barw  ick  v.  English  Joint  Stock  Bank,  L.  R.  2  Ex.  259 ;  Evans  v. 
Davidson,  53  Md.  245.  Post,  §  252.  For  cases  on  fraud  and  deceit  see 
ante,  §§  151-157. 

^  Morier  v.  St.  Paul,  &c.  R.,  31  Minn.  351 ;  ante,  §  244. 
*  Quinn  v.  Power,  87  N.  Y.  535 ;  Ritchie  v.  Waller,  J3  Conn.  155 :  atite, 
§  244. 

6  Atite,  §  154. 

6  Ante,  §§  155-157. 

7  Post,  §§  252-254. 

20 


306  LIABILITY    OF   MASTER 

employment  for  ends  of  his  own  than  in  the  case  of  merely 
negligent  torts.  Some  early  cases,  indeed,  lent  color  to  the 
idea  that  the  proof  of  wilfulness  or  malice  would  itself  con- 
clusively establish  that  the  servant  had  quit  sight  of  the 
object  for  which  he  was  emj)loyed  and  entered  upon  some 
independent  end  suggested  by  his  own  malice.^  Later  cases 
have,  however,  overthrown  this  obviously  incorrect  notion  and 
establislied  the  rule  for  wilful  torts  that  the  master  is  liable 
if  such  wilful  acts  are  committed  within  the  course  of  the 
employment  and  in  furtherance  of  it.^  It  is  noticeable  that 
the  cases  establishing  the  general  rule  were  those  between 
passenger  and  carrier,  but  the  rule  now  extends  beyond  this 
relation.  In  the  case  of  wilful  as  well  as  negligent  torts  the 
test  is,  was  the  servant  acting  for  his  master  and  within  the 
course  of  the  employment?'^  In  such  cases  there  is  usually 
an  authority  to  do  a  certain  thing,  as  to  remove  a  trespasser, 
and  the  wrong  consists  in  an  excess  of  force  or  other  im- 
proper method.  Clearly  in  such  cases  the  servant  is  acting 
for  the  master,  and  in  the  course  of  the  employment,  and  the 
master  is  liable. 

In  New  York  the  doctrine  of  Wriglit  v.  Wilcox'^  was  fol- 
lowed down  to  and  including  Isaacs  v.  Third  Avenue  Railroad 
Co.^  but  was  soon  after  qualified  in  accordance  with  the  mod- 
ern rule.  It  is  said  in  Mott  v.  Consumers'  Ice  Co.,^  speaking 
of  the  language  employed  in  the  earlier  cases,  that  "  These 
intimations  are  subject  to  the  material  qualification,  that  the 
acts  designated  '  wilful,'  are  not  done  in  the  course  of  the  ser- 
vice, and  were  not  such  as  the  servant  intended  and  believed 
to  be  for  the  interest  of  the  master."  The  general  rule  is 
said  in  that  case  to  be,  "  that  for  the  acts  of   the  servant, 

»  M'Maiius  V.  Crickett,  1  East,  106;  Wright  v.  Wilcox,  19  Weud. 
(N.  Y.)  313. 

'^  Seymour  r.  Greenwood,  7  II.  &  N.  355;  Liinpus  r.  London  General 
Omnibus  Co.,  1  II.  &  C.  52(3;  Iliggiiis  c.  Watervlirt  Turnpike  Co.,  46 
N.  Y.  23;  Rounds  v.  Delaware,  &c.  R.,  01  N.  Y.  12!);  Hoffman  v.  N.  Y. 
Cent.,  &c.  R.,  87  N.  Y.  25 ;  Howe  v.  Xewmarch,  12  Allen  (Mass.)  49. 

8  Rounds  I'.  Delaware,  &c.  R.,  supra. 

*  19  Wend.  343. 

«  47  N.  Y.  122.  0  73  N.  Y.  543. 


FOR   TORTS   OF   SERVANT.  307 

within  the  general  scope  of  his  employment,  while  engaged  in 
his  master's  business,  and  done  with  a  view  to  the  further- 
ance of  tliat  business  and  the  master's  interest,  the  master 
will  be  responsible,  whether  the  act  be  done  negligently,  wan- 
tonly, or  even  wilfully."  And  such  is  now  the  recognized 
rule  in  New  York.^ 

A  contract  relation  may  strengthen  the  case  as  against  the 
master.  Thus,  if  the  master  is  under  contract  to  deliver  pure 
milk  and  his  servant  out  of  malice  adulterates  it,  the  master 
is  liable  for  the  consequences.^ 

That  the  servant  disobeyed  the  orders  of  the  master  is 
never  a  sufficient  defence.^  It  must  be  shown  further  that  he 
ceased  to  act  for  the  master  and  in  the  course  of  the  employ- 
ment.* This  is  a  question  of  fact  and  must  frequently  be 
submitted  to  the  jury.^ 

Assault.  If  in  removing  a  trespasser  the  servant  uses  an 
excess  of  force  or  puts  the  trespasser  in  unnecessary  danger, 
tlie  master  is  liable  for  all  damages  sustained  provided  the 
servant  was  acting  within  the  course  of  the  employment  and 
in  the  furtherance  of  it.''  But  if  the  servant  was  exercising 
his  implied  authority  for  private  ends  of  his  own,  as  to  extort 
money,  tben  the  master  is  not  liable.^  And  if  a  brakeman 
accept  a  bribe  to  permit  a  trespasser  to  ride  upon  the  train 
and  afterward  eject  the  trespasser,  the  latter  will  have  no 
action  against  the  railway  company  since  he  and  the  brake- 
man  are  joint  trespassers.^ 

If  a  street-car  driver  wilfully  and  maliciously  drives  his  car 
against  a  vehicle  which  is  obstructing  the  track,  it  is  a  ques- 
tion of  fact  whether  he  does  this  in  the  course  of  the  employ- 

^  Bounds  V.  Delaware,  &c.  R.  supra. 

2  Straiiahan  v.  Coit,  55  Oh.  St.  398 ;  post,  §  253. 

8  Philadelphia,  &c.  R.  v.  Derby,  14  How.  (U.  S.)  468 ;  Fitzsimmons  w. 
Railway  Co.,  98  Mich.  257. 

*  Andrews  v.  Green,  62  N.  II.  436. 

5  French  v.  Cresswell,  13  Ore.  418. 

«  Rounds  V.  Delaware,  &c.  R.,  64  N.  Y.  129. 

^  Illinois  Central  v.  Latham,  72  Miss.  33. 

8  Brevig  r.  Chicago,  &c.  Ry.,  64  Minn.  168.  See  also  Keating  v.  R., 
97  Mich.  154 ;  Chicago,  &c.  R.  v.  West,  125  111.  320. 


308  LIAJJILITY   OF  MASTER 

meat  in  order  to  get  a  clear  track  or  whether  he  does  it  for 
private  spite  and  malice.^  So  also  where  a  janitor  having 
charge  of  a  room  wilfully  shoved  a  ladder  upon  which  a  work- 
man was  standing,  it  is  a  question  of  fact  whether  the  janitor 
did  this  in  order  to  facilitate  his  work  for  the  master  or  out 
of  personal  spite  and  malice.''^  Some  cases  may  be  so  clearly 
outside  the  scope  of  the  employment  that  the  court  will  nut 
submit  the  question  to  a  jury.^  Others  may  be  so  clearly 
within  the  scope  of  the  employment  that  the  court  will  so 
decide.  Between  these  extremes  are  all  the  doubtful  cases  in 
which  the  question  is  to  be  decided  by  the  jury.^ 

It  is  not  a  bar  to  the  plaintiff's  recovery  that  he  provoked 
the  assault.  The  primary  question  is  whether  the  servant 
was  impelled  by  the  purpose  of  furthering  his  master's  affairs. 
If  so  the  master  is  liable,  although  the  provocation  may  be 
given  in  evidence  in  mitigation  of  damages.^  If  not,  then  the 
master  is  not  ordinarily  liable,^  though  tiie  relation  of  carrier 
and  passenger  may  vary  the  result.'' 

Arrest.  Cases  of  unlawful  arrest  involve  nice  questions 
as  to  implied  authority.  If  the  arrest  is  supposedly  in  the 
master's  interests  and  in  the  course  of  the  emi)loyment,  the 
master  is  liable,^  but  if  in  the  interest  of  the  public,  then, 
although  the  occasion  for  the  arrest  may  arise  in  the  course 
of  the  employment,  the  master  is  not  liable.^     Thus,  if  a 

1  Cohen  v.  Dry  Dock,  &c.  R.,  69  N.  Y.  170;  Baltimore,  &c.  R.  v.  Tierce, 
89  Md.  495. 

2  Nelson  Business  College  Co.  v.  Lloyd,  CO  Oh.  St.  418. 

8  Johanson  v.  Tioneer  Fuel  Co.,  72  Minn.  405;  Rudgeair  v.  Reading 
Traction  Co.,  180  Pa.  St.  333;  Brown  v.  Boston  Ice  Co.  (Mass.),  59  N,  E. 
644 ;  Grimes  v.  Young,  51  N.  Y.  App.  Div.  239. 

4  Dyer  v.  Munday,  1895,  1  Q.  B.  742 ;  Bergman  v.  Hendrickson,  106 
Wis.  434. 

6  Bergman  v.  Hendrickson,  supra. 

6  Scott  V.  Central  Park.  &c.  R.,  53  Ilun  (N.  Y.),  414.  But  see  Weber 
V.  Brooklyn,  &c.  R.,  47  App.  Div.  306. 

">  Post,  §  253. 

8  Palmeri  v.  Manhattan  Ry.,  133  N.  Y.  261 ;  Staples  v.  Schmid,  18  R.  I. 
224 ;  Smith  r.  Munch,  65  Minn.  256. 

»  Mulligan  v.  N.  Y.  &  R.  B.  Ry.,  129  N.  Y.  506  ;  Abrahams  v.  Deakin, 
1891,  1  Q.  B.  516. 


FOR   TORTS   OF   SERVANT.  309 

ticket-agent  causes  an  arrest  in  order  to  secure  good  money 
in  place  of  what  he  considers  bad  money,  this  is  in  the 
master's  interest ;  but  if  he  causes  an  arrest  in  consequence 
of  a  warning  by  the  police,  he  is  acting  in  the  interest  of  the 
public.^  The  distinction  seems  to  be  that  a  servant  may  have 
an  implied  authority  to  protect  his  master's  interests  by  caus- 
ing the  arrest  of  a  person  who  is  believed  to  be  infringing 
them,  but  that  he  has  no  implied  authority  to  seek  to  punish 
such  a  person  after  the  attempt  has  ceased.^  To  lock  in  a 
passenger  who  refuses  to  pay  his  fare  or  give  up  his  ticket 
is  an  act  done  for  the  master,  and  within  the  course  of  the 
employment.^ 

Whether  a  servant  has  any  implied  authority  to  cause  an 
arrest  must  depend  upon  the  nature  of  his  duties.  "  The 
authority  to  arrest  is  only  implied  where  the  duties  which  an 
agent  is  employed  to  discharge  could  not  be  properly  dis- 
charged without  the  power  to  arrest  offenders  promptly  and 
on  the  spot."  ^  It  has  been  held  that  a  clerk  in  a  store  has  no 
such  implied  power  to  arrest  and  search  a  customer  suspected 
of  having  stolen  the  employer's  goods.^  But  this  seems 
clearly  incorrect  in  the  light  of  subsequent  decisions.** 

In  some  jurisdictions  it  seems  to  be  held  that  a  servant 
must  have  express  authority  from  the  master  to  cause  an 
arrest,  or  to  set  the  criminal  law  in  motion.'^ 

Other  ivilful  torts.  A  master  is  liable  for  libel,^  malicious 
prosecution,^  deceit,^*^  infringement  of  patent,^^  or  other  wilful 

1  Mulligan  v.  N.  Y.  &  R.  B.  Ry.,  129  N.  Y.  506  ;  Abrahams  v.  Deakin, 
1891,  IQ-B.  516. 

2  Allen  V.  London  &  S.  W.  Ry.,  L.  R.  6  Q.  B.  65. 
8  Farry  v.  Great  Northern  Ry.,  1898,  2  Ir.  352. 

*  Ashton  V.  Spiers,  9  Times  Law  Rep.  606. 

6  Mali  i;.  Lord,  39  N.  Y.  381. 

^  See  criticism  in  Staples  v.  Schmid,  18  R.  I.  224;  Knowlesy.  Bullene, 
71  Mo.  App.  341 ;  Fortiine  v.  Trainor,  47  N.  Y.  St.  Rep.  58  ;  aff'd.  141 
N.  Y.  605  ;  Mallach  v.  Ridley,  6  N.  Y.  St.  Rep.  651;  15  lb.  4. 

'  Turnpike  Co.  v.  Green,  86  Md.  161. 

8  Andres  v.  Wells,  7  Johns.  (N.  Y.)  260;  Bruce  i'.  Reed,  104  Pa.  St.  408 

9  Reed  v.  Home  Savings  Bank,  130  Mass.  443. 

10  Ante,  §§  151-157. 

11  Sykes  v.  Howarth,  L.  R.  12  Ch.  Div.  826. 


310  LIABILITY   OF   MASTER 

or  malicious  wrongs  committed  by  the  servant  and  within  the 
course  of  the  employment.  It  has  sometimes  been  held  that 
a  master  is  liable  for  such  torts  only  wlicn  expressly  com- 
manded or  ratified,^  and  it  was  once  thought  that  corporations 
could  not  be  liable  for  torts  involving  wilfulness  or  malice  ;2 
but  these  notions  have  practically  passed  away  with  a  better 
understanding  of  the  true  ground  for  such  liability.^ 

§  253.  —  (2)  Wilful  or  malicious  injuries  to  passengers. 

A  carrier  is  under  a  high  degree  of  duty,  vohmtarily  as- 
sumed, to  passengers,  and  among  these  duties  is  the  obliga- 
tion to  protect  them  from  all  misconduct  on  the  part  of  its 
servants.  Tiie  ordinary  limits  of  liability  for  wilful  and 
malicious  acts  do  not  bound  this  obligation.  Whether  the 
servant  is  acting  for  the  master  or  for  himself  the  master  is 
liable  for  all  wilful  or  malicious  injuries  inflicted  by  the  ser- 
yant  upon  the  passenger.^  Some  cases  fail  to  make  this  dis- 
tinction between  the  liability  of  a  master  for  the  malicious 
torts  of  servants  toward  third  persons  generally  and  toward 
third  persons  to  whom  the  master  owes  a  special  duty,^  but 
the  weight  of  authority  is  now  decidedly  in  favor  of  such  a 
distinction,  and  in  New  York  the  contrary  decisions  have 
been  overruled.^ 

It  is  necessary  in  order  that  the  doctrine  be  applicable  that  the 
relation  of  carrier  and  passenger  should  actually  exist.  It  is 
often  a  nice  question  whether  the  relation  has  begun  or  has  been 
terminated,  but  this  lies  outside  the  scope  of  this  subject."    It 

1  Wallace  v.  Finberg,  46  Tex.  35. 

^  5  Thompson  on  Corporations,  §  6275  et  seq. 

8  Philadelphia,  &c.  R.  v.  Quigley,  21  IIow.  (U.  S.)  202 ;  Goodspeed  v. 
East  Iladdam  Bank,  22  Conn.  530. 

*  Stewart  v.  Brooklyn,  &c.  R.,  90  N.  Y.  588 ;  Dwinelle  r.  N.  Y.  Cent. 
&  II.  R.  R.,  120  N.  Y.  'll7  ;  Craker  v.  Chicago,  &c.  R.,  36  Wis.  057 ;  Haver 
V.  Central  R.,  62  X.  J.  L.  282. 

6  Allen  V.  Railway  Co.,  L.  R.  6  Q.  B.65  ;  Isaacs  v.  R.  Co.,  47  X.  Y.  122. 

«  Stewart  v.  R.  Co.,  90  X.  Y.  588. 

T  See  INIcGilvray  r.  West  End  Ry.,  164  Mass.  122  ;  Wise  v.  Ry.  Co., 
91  Ky.  537;  Central  Ry.  v.  Peacock,  69  Md.  257;  Peeples  v.  Ry.,  60  Ga. 
281 ;  Krantz  v.  R,  12  Utah,  104. 


FOR   TORTS    OF    SERVANT.  3H 

may  continue  even  after  the  passenger  has  once  left  the  prem- 
ises if  lie  afterwards  returns  for  his  baggage.^ 

This  doctrine  also  has  some  application  beyond  the  special 
relation  of  carrier  and  passenger  in  cases  where  by  contract 
the  master  has  voluntarily  undertaken  a  particular  duty 
toward  a  definite  person,  and  has  intrusted  the  discharge  of 
the  duty  to  a  servant.^ 

That  the  liability  of  a  carrier  for  wilful  attacks  upon  pas- 
sengers stands  upon  a  different  footing  from  the  ordinary 
liability  of  a  master  for  the  torts  of  his  servant  is  further 
illustrated  by  the  fact  that  a  carrier  is  liable  to  a  passenger 
for  the  assault  upon  him  by  another  passenger  if,  after  due 
notice,  the  carrier  does  not  take  proper  measures  to  protect 
the  passenger  so  menaced  or  assaulted.^ 

If,  however,  a  passenger  provokes  an  assault  by  indecent 
and  insulting  language,  it  seems  he  may  lose  the  high  degree 
of  protection  involved  in  the  relation  of  carrier  and  passenger, 
and,  in  such  case,  he  can  recover  only  if  the  servant  was 
acting  within  the  scope  of  the  employment.  Thus,  if  a  pas- 
senger provokes  a  servant  of  the  carrier  to  an  assault  outside 
the  scope  of  the  employment,  the  master  is  not  liable.^  But 
if  one  provokes  a  servant  to  an  assault  within  the  scope  of 
the  employment,  the  master  is  liable.^ 

§  254. —  (3)    Misuse  of  dangerous  instrumentalities. 

If  the  master  intrusts  the  care  and  use  of  an  inherently 
dangerous  instrumentality  to  a  servant,  he  remains  liable  for 
any  want  of  care  on  the  part  of  the  servant  and  also  for  any 
■wanton,  malicious,  or  mischievous  use  of  the  instrument  by 
the  servant.^ 

1  Daniel  v.  R.,  117  N.  C.  .592.  Cf.  Little  Miami  R.  v.  Wetmore,  19 
Oh.  St.  110. 

2  Stranahan,  &c.  Co.  v.  Coit,  55  Oh.  St.  398. 

8  Flint  V.  Xorwich,  34  Conn.  554;  Lucy  v.  Ry.,  64  Minn.  7;  Putnam 
V.  R.  Co.,  55  N.  Y.  108 ;  Meyer  v.  Ry.,  54  Fed.'  R.  116  ;  Pittsburg,  &c. 
Ry.  V.  Pillow,  76  Pa.  St.  510;  Chicago  &  Alton  R.  v.  Pillsbury,  123  HI.  9, 

4  Scott  V.  Central  Park,  &c.  R.,  53  Hun  (N.  Y.)  414.  But  see  Weber 
V.  Brooklyn,  &c.  R.,  47  N.  Y.  App.  Div.  306. 

5  Bergman  v.  Hendrickson,  106  Wis.  434. 

«  Pittsburgh,  &c.  R.  v.  Shields,  47  Oh.  St.  387. 


312  LIABILITY   OF   MASTER 

Tlie  typical  case  is  tlic  misuse  of  torpedoes  intrusted  by  a 
railway  company  to  the  care  of  trainmen.  These  are  supplied 
for  use  in  case  of  fog.  If  a  trainman  makes  a  use  or  misuse 
of  tlicra  for  his  own  ends,  as  to  celebrate  a  public  holiday  or 
to  have  sport  with  timid  persons,  is  the  railway  company 
liable  for  any  damaije  suffered  therein'  by  third  persons?  It 
has  been  held  that  it  is  liable,  upon  the  ground  that  the 
servant  having  been  intrusted  with  the  safe  keeping  of  the 
dangerous  instrumentality,  the  master  is  liable  for  a  want  of 
care  whether  such  want  of  care  is  due  to  negligence  or  wilful- 
ness. The  duty  of  the  servant  is  not  only  to  use  the  torpedoes 
when  requisite,  l)ut  to  keep  them  safely  when  not  in  use.  In 
taking  them  from  the  place  where  they  are  kept,  and,  in  mere 
caprice,  using  them  for  his  own  ends,  he  violates  the  duty  of 
safe  keeping  and  renders  the  master  liable.^ 

This  doctrine  has  not  met  with  universal  approval,  and 
other  torpedo  cases  have  been  decided  upon  a  strict  applica- 
tion of  the  doctrine  that  the  master  is  liable  for  a  wilful  or 
malicious  act  only  when  the  servant  does  the  act  for  the 
master  in  the  course  of  the  employment.^ 

If  the  torpedoes  are  taken  by  a  servant,  as  a  fireman,  to 
whose  care  they  are  not  confided,  the  master  would  not  be 
liable.^ 

Another  somewhat  similar  class  of  cases  is  that  in  which 
an  engineer  blows  his  whistle  or  lets  off  steam  merely  for 
the  purpose  of  frightening  horses,  and  not  in  the  furtherance 
of  any  business  or  duty  of  the  master.  The  almost  universal 
opinion  is  that  the  master  is  liable  under  such  circumstances. 
If  the  servant  is  engaged  in  operating  the  instrumentality 
intrusted  to  him  and  while  so  engaged  wilfully  perverts  the 
agency  to  the  purpose  of  wanton  mischief,  it  is  all  the  same 
as  if  he  had  produced  the  same  result  by  negligence  or 
inattention.* 

1  Hid. 

2  Smith  V.  N.  Y.  Cent.  &  11.  R.  R.,  78  Hun  (N.  Y.)  524. 
8  Chicago,  &c.  R.  v.  P^pperson,  26  111.  App.  72. 

*  Toledo,  &c.  Ry.  i\  Harmon,  47  111.  298;  Chicago,  &c.  Ry.  v.  Dickson, 
63  111.  151;  Bittle  v.  Camden  &  Atl.  R.,  55  N.  J.  L.  015;  Georgia  R.  v. 


FOR   TORTS   OF   SERVANT.  313 

Where  an  engineer  in  order  to  frighten  passengers  on  a 
street  car  started  his  engine  suddenly  and  thereby  caused  a 
passenger  to  jump  and  injure  herself,  it  has  been  held  that 
the  engineer  was  acting  outside  the  scope  of  his  duties  and 
the  company  was  not  liable.^  This  conclusion  is  contrary  to 
the  cases  cited  above  and  appears  to  lose  sight  of  the  prin- 
ciples upon  which  those  cases  were  decided.  It  has  also 
been  held  that  a  hand-car  is  not  dangerous  enough  to  be 
brought  within  the  rule.^  If  the  servant  is  not  authorized 
to  run  the  locomotive,  clearly  his  running  it  for  ends  of  his 
own  would  be  outside  the  scope  of  the  employment.^  A  cus- 
tom of  non-authorized  servants  to  use  a  locomotive,  known 
to  the  master,  may  be  equivalent  to  an  authority.'* 

§  255.     Liability  of  master  for  exemplary  damages. 

A  master  is  liable  for  exemplary  damages  for  a  tort  of  a 
servant  which  he  either  commands  or  ratifies  if  he  would  be 
liable  for  such  damages  in  case  he  had  personally  committed 
the  tort.^ 

If  the  master  has  not  commanded  or  ratified  such  tort, 
but  is  held  liable  simply  upon  the  doctrine  that  the  servant 
has  acted  for  him  within  the  scope  of  the  employment,  there 
is  a  sharp  conflict  of  authority.  Many  jurisdictions  hold  the 
master,  whether  a  natural  person  or  a  corporation,  not  liable 
in  punitive  damages  under  such  circumstances.^  Other 
jurisdictions,  while  holding  the  same  as  to  masters  who 
are  natural    persons,  hold    that    corporations    are    liable  in 

Newsorae,  60  Ga.  492 ;  Texas  &  P.  Ry.  i'.  Scoville,  62  Fed.  R.  730;  Cobb 
V.  Columbia,  &c.  R.,  37  S.  C.  194;  Skipper  v.  Clifton  Mfg.  Co.  (S.  Car.), 
36  S.  E.  Rep.  509. 

1  Stephenson  v.  Southern  Pac.  Co.,  93  Calif.  558. 

2  Branch  v.  International,  &c.  Ry.,  92  Tex.  288. 
8  Cousins  V.  Hannibal  &  St.  Jo.  R.,  66  Mo.  572. 

^  East  St.  Louis  Connecting  Ry.  v.  Reames,  173  111.  582. 

6  Denver,  &c.  R.  v.  Harris,  122  U.  S.  597. 

6  Cleghorn  v.  N.  Y.  Cent.  &  H.  R.  R.,  56  N.  Y.  44 ;  Haines  ».  Schultz, 
50  N.  J.  L,  481;  Craker  v.  Chicago,  &c.  R.,  36  Wis.  657;  Warner  v. 
Southern  Pac.  R.,  113  Calif.  105;  Maisenbacker  v.  Society  Concordia,  71 
Conn.  369;  Lake  Shore,  &c.  R.  v.  Prentice.  147  U.  S.  IQl^i.  : 


314  LIABILITY   OF   MASTER   FOR   TORTS   OF   SERVANT. 

punitive  damages   since   corporations   can  act  only  through 
agents.^ 

§  256.     Imputed  notice. 

Knowledge  of  a  servant  concerning  property  committed  to 
his  care  is  the  knowledge  of  the  master.  Hence,  if  the  ser- 
vant knows  of  the  vicious  tendencies  of  an  animal  of  which 
he  has  charge  this  knowledge  is  imputed  to  the  master.^ 

1  Goddard  v.  Grand  Trunk  R.,  57  ^le.  202  ;  Thiladelphia,  &c.  R.  v. 
Larkin,  47  Md.  155;  Atlantic,  &c.  R.  v.  Dunn,  19  Oh.  St.  162;  lb.  590; 
Citizens'  Street  R.  v.  Willoeby,  134  Ind.  563;  Wheeler,  &c.  Co.  v.  Boyce, 
36  Kans.  350. 

-  Brice  v.  Bauer,  108  N.  Y.  428 ;  Clowdis  v.  Fresno,  &c.  Co.,  118  Calif. 
315. 


LIABILITY  OF  PUBLIC   BODIES   FOE   TORTS   OF  SERVANTS.      315 


CHAPTER  XXII. 

LIABILITY  OF   PUBLIC  AGENCIES   OR   PUBLIC   CHARITIES   FOR   TORTS 

OF   SERVANTS. 

§  257.     General  doctrine. 

While  a  private  person  or  corporation  may  be  liable  for  the 
torts  of  servants,  a  public  corporation,  entity,  person,  or 
charity,  is  not  ordinarily  liable  for  the  torts  of  officers  or 
servants.  This  is  placed  on  doctrines  of  public  policy  and 
expediency.  It  may  be  said,  subject  to  qualifications  to  be 
hereafter  noted,  that  the  doctrine  of  respondeat  superior  does 
not  apply,  —  (1)  to  the  state  or  its  agencies  generally,  (2)  to 
municipalities  so  far  as  they  are  acting  in  a  governmental 
capacity,  (3)  to  public  officers  generally,  (4)  to  public  charities. 

§  258.     Liability  of  the  State  and  its  agencies  for  torts  of  officers. 

The  Federal  or  State  governments  are  not  liable  for  the 
torts  of  their  officers.^ 

Counties  are  not  liable  for  the  torts  of  their  officers,  unless 
such  liability  is  fixed  by  positive  law.^  Even  negligence  in 
the  construction  of  roads  and  bridges  does  not  render  a 
county  liable  according  to  the  great  weight  of  authority  ;3 
nor  does  negligence  in  the  construction  or  maintenance  of 
county  buildings,  as  court  houses  and  jails.*  New  England 
towns  stand  in  this  respect  upon  the  same  basis  as  counties,^ 
as,  indeed,  do  all  such  quasi-corporations  as  townships,  school- 
districts,  road-districts,  and  the  like.^     In  many  jurisdictions 

1  Mechera,  Public  Officers,  §§  848,  849. 

2  7  Am.  &  Eng.  Encyc.  of  Law  (2d  ed.),  pp.  947-953. 

8  lUd,  p.  950 ;  Markey  v.  County  of  Queens,  154  N.  Y.  675,  contra  in 
Penn.  and  Md. 
*  Ihid,  p.  949. 

6  Dillon,  Munic.  Corp.,  §  962. 
6  Ibid,  §  963. 


316  LIABILITY    OF   PUBLIC    BODIES 

statutes  expressly  confer  a  remedy  as  against  such  quasi- 
corporations  especially  for  injuries  resulting  from  defective 
highways.^ 

§  259.     Liability  of  municipal  corporation  for  torts  of  officers  and 
servants. 

Municipal  corporations,  or  chartered  cities,  villages,  or 
towns,  stand  ui)on  a  somewhat  different  basis.  It  is  said 
that  in  the  case  of  such  cor j)orat ions  the  j)crsons  comprising 
them  are  regarded  as  having  voluntarily  sought  the  powers 
conferred  and  must  therefore  be  held  to  a  higher  degree  of 
liability.  Moreover  such  powers  may  include  not  only  the 
usual  public  governmental  powers,  but  also  special  powers 
or  franchises,  such  as  the  power  to  supply  gas,  electric  light, 
water,  wharves,  and  the  like.  In  the  exercise  of  these  latter 
powers  the  municipality  is  acting  in  much  the  same  capacity 
as  a  private  corporation  engaged  in  the  same  business.  Thus 
in  Hill  V.  Boston,^  it  was  held  that  the  city  was  not  liable  for 
a  defective  stairway  in  a  public  school-house,  and  that  in 
general  a  city  is  liable  (in  the  absence  of  statute)  only  when 
the  duty  for  breach  of  which  the  action  is  brought  is  a  new 
one,  and  is  such  as  is  ordinarily  performed  by  a  trading 
company.  This  distinction  would  exclude  municipal  liability 
for  defective  highways,  and  the  court  in  the  case  cited  argues 
strongly  for  such  a  result,  but  the  great  weight  of  American 
authority  is  now  to  the  effect  that  such  a  liability  exists.^ 

It  follows  that  municipal  and  quasi-municipal  corporations, 
so  far  as  they  are  acting  in  a  governmental  or  discretionary 
character  for  public  ends  are  not  liable  for  the  negligent  or 
wilful  wrongs  committed  by  their  agents  or  servants.*  But 
where  distinct  duties  are  imposed  upon  them,  purely  minis- 
terial and  involving  no  exercise  of  discretion,  the  same  lia- 
bility attaches  as  in  the  case  of  private  persons  doing  the 

1  Ibid,  §  1000  and  notes. 

2  122  Mass.  344. 

8  Dillon,  IVIunic.  Corps.  §§  1017-1023 ;  Conrad  v.  Ithaca,  16  N.  Y.  158. 
*  City  of  Richmond  v.  Long's  Adm'r,  17  Gratt.   (Va.)  375;  City  of 
Anderso'n  r.  East,  117  Ind.  126  ;  Hines  i;.  Charlotte,  72  Mich.  278. 


FOR   TORTS   OF   SERVANTS.  317 

same  duty.^  Thus  a  city  is  not  liable  for  the  negligence  of 
its  officer  in  shooting  at  an  unmuzzled  dog,^  nor  for  the  neg- 
ligent acts  of  members  of  its  fire  department,^  or  of  any  of 
the  other  of  its  agents  or  servants  engaged  in  governmental 
or  police  duties.^  A  city  is  not  rendered  liable  by  the  alle- 
gation or  proof  that  it  appointed  an  incompetent  officer.^ 
But  it  is  liable  for  failure  to  keep  its  streets  in  proper  repair,® 
or  properly  to  plan  and  construct  its  public  worksJ 

§  260.     Liability  of  public  officer  for  torts  of  subordinates. 

Public  officers  who  act  for  the  public  generally,  and  not 
for  private  individuals  who  may  have  need  of  special  service, 
are  not  liable  for  the  torts  of  subordinates  duly  and  properly 
selected.  A  subordinate  is  regarded,  like  the  officer  himself, 
as  an  agent  of  the  public.  Each  is  liable  for  his  own  torts, 
but  one  is  not  liable  for  the  torts  of  the  other.^  A  post- 
master is  not  liable  for  the  tort  of  a  deputy  or  clerk,  unless 
some  personal  negligence  of  his  own  be  proved.^  A  collector 
of  customs  is  not  liable  for  the  negligence  of  his  subordinate.^^ 
An  army  or  naval  officer  is  not  liable  for  the  negligence,  or 
other  wrong,  of  an  inferior  officer,ii  unless  he  has  participated 
in  such  wrongful  act.^'-^ 

1  Seymour  v.  Cummins,  119  Ind.  148;  Bates  v.  Westborough,  151  Mass. 
174;  Barron  v.  Detroit,  94  Mich.  601.  But  see  Howard  v.  Worcester,  153 
Mass.  426 

2  Whitfield  V.  Paris,  84  Tex.  431 ;  Culver  v.  Streator,  130  111.  238. 

3  Dodge  V.  Granger,  17  R.  I.  664;  Gillespie  v.  Lincoln,  35  Neb.  34. 

4  Robfnson  v.  Rohr,  73  Wis.  436  ;  O'Leary  v.  Marquette,  79  Mich.  281 ; 
Dillon,  Munic.  Corp.  §§  975-977. 

6  Craig  y.  Charleston,  180  111.  154;  Mclllhenny  v.  Wilmington,  127 
N.  C.  146. 

6  Conrad  v.  Ithaca,  16  N.  Y.  158. 

'  Barron  v.  Detroit,  94  Mich.  601 ;  Seymour  v.  Cummins,  119  Ind.  148. 

8  Lane  v.  Cotton,  1  Ld.  Raym.  646 ;  Governors,  &c.  v.  Meredith,  4  T. 
R.  794. 

9  Dunlop  V.  Munroe,  7  Cranch,  242;  Keenan  v.  Southworth,  110  Mass. 
474 ;  Hutchins  v.  Brackett,  22  N.  H.  252;  Con  well  v.  Voorhees,  13  Ohio, 
523. 

10  Robertson  v.  Sichel,  127  U.  S.  507. 

11  Nicholson  v.  Mouncey,  15  East,  384. 

12  Castle  V.  Duryee,  1  Abb.  App.  (N.  Y.)  327. 


318  LIABILITY   OF   PUBLIC   BODIES 

In  like  manner  a  i)ublic  trustee,  as  a  scliool  trustee,  is  not 
liable  for  the  negligence  of  workmen  or  servants  employed 
to  make  repairs  upon  a  public  building.^  Nor  is  a  receiver 
acting  under  the  orders  of  the  court  liable  for  the  torts  of 
servants  em])loyed  by  him.- 

Public  olhcers  who  act  for  individuals,  as  sheriffs,^  re- 
corders of  deeds,**  clerks  of  courts,^  and  others  whose  acts 
are  ministerial  or  administrative,^  are  liable  to  the  individuals 
for  whom  they  act  for  any  negligence  or  other  tort  of  a  sub- 
ordinate committed  in  the  course  of  oflicial  transactions. 
This  rule  of  liability  is  very  frequently  applied  in  the  case 
of  sheriffs^ 

§  261.     Public  charities. 

Upon  the  question  whether  a  public  charitable  corporation 
or  trust  is  liable  for  the  negligence  or  other  torts  of  its  agents 
and  servants,  there  are  these  diverse  holdings  :  — 

(1)  It  is  sometimes  held  that  the  trust  funds  contributed 
for  charitable  objects  cannot  be  diverted  to  the  payment  of 
damages  occasioned  by  the  negligence  or  other  torts  of  agents 
and  servants.^  Under  this  holding  it  could  make  no  differ- 
ence whether  the  one  injured  was  a  gratuitous  recipient  of 
the  bounty,  one  who  paid  for  the  service,  or  an  outsider.  Nor 
could  it  make  any  difference  whether  the  negligent  person  was 
one  charged  with  the  administration  of  the  fund  or  a  mere 
servant. 

(2)  The  doctrine  that  the  charitable  funds  cannot  be  reached 
in  payment  of  damages  for  torts,  has  been  doubted  or  repudi- 

1  Donovan  v.  McAlpin,  85  N.  Y.  185;  Wash  v.  Trustees,  96  N.  Y.427. 

2  Cardot  v.  Barney,  03  N.  Y.  281. 

8  M'Intyre  v.  Trumbull,  7  Johns.  (N.  Y.)  35;  Prosser  v.  Coots,  50 
Mich.  26-2;  State  v.  Moore,  19  Mo.  3G9. 
*  Russell  V.  Lavvton,  14  Wis.  202. 

5  McNutt  V.  Livingston,  15  Miss.  G41  ;  Moore  v.  McKinney,  GO  Iowa, 
367. 

6  Wood  V.  Farnell,  50  Ala.  546. 

7  Mechem,  Public  Oflicers,  §  798. 

8  Duncan  v.  Findlater,  6  CI.  &  Fin.  89 1  (flictim)  ;  Feoffees  of  Ileriot's 
Hospital  V.  Ross,  12  CI.  &  Fin.  507 ;  Fire  Ins.  Patrol  v.  Boyd,  120  Pa.  St. 
624,  also  113  Pa.  St.  269 ;  Dowries  v.  Harper,  101  Mich.  555. 


FOR   TORTS   OF   SERVANTS.  319 

ated  bj  other  courts,  but  there  has  been  no  agreement  as  to 
the  nature  and  extent  of  the  liability  of  the  charity. 

(«)  The  general  doctrine  of  respondeat  superior  has  been 
applied  and  the  charity  held  like  any  other  master  for  the 
torts  of  servants.^ 

(5)  The  general  doctrine  of  respondeat  superior  has  been 
admitted,  but  it  has  been  held  that  one  accepting  the  services 
or  bounty  of  the  charity  is  a  mere  licensee  and  must  take  the 
service  as  he  finds  it,  that  is,  "  that  there  is  no  liability  on 
the  part  of  charitable  corporations,  arising  out  of  the  adminis- 
tration of  the  charity,  to  those  who  accept  their  bounty."  ^ 
Under  this  doctrine  there  is  a  further  divergence  of  opinion 
as  to  whether  one  who  pays  for  the  service  is  a  recipient  of 
the  bounty.  One  case  holds  that  he  is,  treating  the  payment 
as  a  mere  contribution  to  the  charity.^  Other  cases  seem  to 
regard  the  payment  as  imposing  a  special  duty  toward  the 
payer  for  breach  of  whicli  an  action  will  lie.  ^ 

(c)  The  general  doctrine  of  respondeat  superior  has  not 
been  admitted,  and  recovery  is  limited  to  those  cases  where 
it  is  shown  that  the  administrators  of  the  charity  were  them- 
selves negligent  in  the  appointment  of  incompetent  servants 
or  in  the  discharge  of  some  other  corporate  or  specially  im- 
posed duty."  The  theory  of  this  class  of  cases  seems  to  be 
the  one  most  generally  acceptable,  namely,  that  while  a 
charitable  corporation  may  be  liable  for  negligence  in  the 

^  Glavin  v.  Rhode  Island  Hospital,  12  R.  I.  411;  Foreman  v.  Mayor, 
L.  R.  6  Q.  B.  214.  See  also  Donaldson  v.  Commissioners,  30  NewBruns. 
279. 

^  Powers  V.  IVlass.  Hqinoeo|mthic  Hospital,  101  Fed.  Rep.  896.  And 
see  Gooch  v.  Association,  109  Mass/SoS; 

8  Ibid. 

*  Ward  V.  St.  Vincent's  Hospital,  39  N.  Y.  App.  Div.  624 ;  Richard- 
son V.  Carbon  Hill  Coal  Co.,  6  Wash.  52,  S.  C.  10  Wash.  648.  See  Glavin 
V.  Rhode  Island  Hospital,  supra. 

*  McDonald  v.  Massachusetts  General  Hospital,  120  Mass.  432 ;  Union 
Pacific  Ry.  v.  Artist,  60  Fed.  Rep.  365;  Joel  v.  Woman's  Hospital,  89 
Hun  (N.  y.),  73;  Van  Tassell  v.  Manhattan  Eye  &  Ear  Hospital,  39  N.  Y. 
St.  Rep.  781, 15  N.  Y.  Supp.  620;  Hearns  v.  AVaterbury  Hospital,  66  Conn. 
98;  Eighmy  v.  Union  Pac.  Ry.,  93  Iowa,  538;  Richardson  v.  Carbon 
Hill  Coal  Co.,  10  Wash.  648. 


320  LIABILITY   OF   PUBLIC   BODIES 

performance  of  a  corporate  dut}-,  the  doctrine  of  respondeat 
superior  is  not  applicable  to  it  so  as  to  render  it  liable  for  the 
torts  of  its  servants.^  This  is  merely  an  extension  to  chari- 
ties of  a  doctrine  elsewhere  applied,  that  officers  or  trustees 
for  public  purposes  are  exempt  from  liability  for  torts  of 
servants  2  but  not  for  their  own  torts  j^  quaiilied  by  the 
further  consideration  that  some  duties  are  imposed  upon 
public  bodies  in  such  a  way  tliat  they  cannot  rid  themselves 
of  liability  by  putting  the  performance  of  the  duty  into  hands 
of  servants.*  Under  this  view  a  charitable  hospital,  for 
example,  has  imposed  upon  it  the  duty  to  use  due  care  to 
provide  safe  and  suitable  hospital  appliances  and  skilled 
and  competent  physicians,  surgeons,  and  nurses,  and  for  a 
failure  to  fulfil  this  duty  it  would  be  liable  to  one  injured 
thereby;  but  having  fulfilled  this  duty,  it  is  not  liable  for  the 
negligence  of  such  attendants  or  servants.^  It  is  further  to 
be  noted  that  physicians  and  surgeons  arc  not  the  servants 
of  the  hospital  or  other  body  that  furnishes  them  and  that  in 
any  event  liability  can  attach  only  for  negligently  furnishing 
incompetent  practitioners.^ 

Two  classes  of  cor{)orations  or  agencies  must  be  distin- 
guished. First,  where  a  corporation  or  board  of  managers 
exercises  governmental  ])Owers  as  an  agent  of  the  state  or 
municipality,  it  falls  under  the  head  of  })ublic  agencies 
already  considered.'^  Second,  private  corporations  organized 
for  the  protection  of  some  interest  of  their  supporters,  as  a 
"  protective  association  "  supported  by  insurance  companies, 

1  See  the  very  full  and  able  discussion  by  Hamersley,  J.,  iu  Ilearns  v. 
Waterbury  Hospital,  O'j  Conn.  98. 

'-  Ilolliday  r.  St.  Leonard's,  11  C.  B.  N.  s.  192. 

8  Mersey  Docks  v.  Gibbs,  L.  R.  1  II.  L.  93;  Coe  v.  Wise,  5  B.  &  S. 
440. 

*  Mersey  Docks  v.  Gibbs,  supra. 

5  Union  Pacific  Ry.  v.  Artist,  60  Fed.  Rep.  supra ;  Ilearns  v.  Water- 
bury  Hospital,  supra. 

6  Ante,  §  2:52. 

'  City  of  Richmond  i'.  Long's  Adm'r,  17  Gratt.  (Va.)  375  ;  Benton  v. 
Trustees,  140  Mass.  13 ;  Williamson  v.  Louisville  Industrial  School,  95 
Ky.  251. 


FOE   TORTS   OF   SERVANTS.  321 

are   not   public   charities   merely   because   they  incidentally 
render  aid  gratuitously  to  outsiders.^ 

§  262.     Liability  of  private  person  served  by  public  ofiBcer. 

Any  person  may  avail  himself  of  the  services  of  a  public 
officer.  If  he  directs  the  doing  of  a  lawful  act  he  is  not 
liable  if  the  officer  does  an  unlawful  one  or  carries  out  the 
mandate  by  unlawful  means.^  In  order  to  render  the  em- 
ployer liable  it  is  necessary  to  show  that  he  either  directed 
an  unlawful  act  or  subsequently  ratified  it ;  ^  in  such  cases 
the  employer  becomes  a  participant  in  the  unlawful  act. 

Even  where  the  statute  requires  the  keepers  of  places  of 
amusement  who  apply  for  a  special  police  officer  to  pay  his 
salary  and  "  to  be  liable  to  parties  aggrieved  by  any  official 
misconduct  of  such  police  officer,  to  the  same  extent  as  for 
the  torts  of  agents  and  servants  in  their  employment,"  it  is 
held  that  such  an  officer  is  not  a  servant  and  the  person  who 
applies  for  his  appointment  and  pays  his  salary  is  not  liable 
for  his  official  misconduct  in  which  such  person  does  not  par- 
ticipate.* But  such  officer,  if  in  fact  also  a  servant  in  and 
about  the  place,  may  act  either  as  officer  or  as  servant :  if  he 
acts  as  officer  the  employer  is  not  liable  on  the  doctrine  of 
respondeat  superior ^^  but  if  he  acts  as  servant  the  employer 
may  be  liable  on  that  doctrine.^ 

^  Newcomb  ik  Boston  Protective  Department,  151  Mass.  215;  {Cf.  Fire 
Ins.  Patrol  v.  Boyd,  supra);  Chapin  v.  Holyoke,  &c.  Assn.,  165  Mass.  280. 
See  also  Wabash  R.  v.  Kelley,  153  Ind.  119. 

2  Sutherland  v.  Ingalls,  (33  Mich.  620. 

8  Hyde  v.  Cooper,  26  Vt.  552.  See  Mechem  on  Public  Officers,  §§  904- 
907. 

*  Healey  v.  Lothrop,  171  Mass.  263. 

6  Ibid.  ' 

6  Dickson  v.  Waldron,  135  Ind.  507. 


21 


322  LIABILITY   OF   MASTER 


CnAPTER    XXIII. 

LTAinLTTY    OF   MASTER   FOR    PENALTIES    AND    CRIMES. 
§  263.     Introductory. 

An  agent  or  servant  in  the  course  of  his  master's  business 
may  do  an  act  which  is  subject  to  a  penalty  or  to  punishment 
as  a  crime.  Such  an  act  may  give  rise  to  an  action  by  a  pri- 
vate person  to  recover  a  penalty,  or  to  a  criminal  prosecution 
by  the  state.  The  problem  in  either  case  is  whether  the  act  of 
a  servant  in  the  conduct  of  the  master's  business  and  in  the 
course  of  the  employment,  but  not  authorized  or  participated 
in  by  the  master,  will  subject  the  latter  to  the  penalty  or  to 
a  conviction  for  crime. 

§  264.     Liability  to  private  penalties. 

Penalties  recoverable  by  private  persons  are  usually  the 
result  of  the  commission  of  a  statutory  tort,  that  is  a  tort 
created  and  defined  by  statute  and  not  by  the  common  law. 
There  seems  to  be  no  distinction  between  the  liability  of  a 
constituent  for  the  act  of  his  representative  amounting  to  a 
common-law  tort  and  an  act  amounting  to  a  statutory  tort. 
In  either  case  the  test  is  whether  the  act  was  done  by  the  agent 
or  servant  in  the  master's  behalf  and  in  the  course  of  the 
employment. 

The  question  arises  frequently  under  the  statutes  giving  a 
wife  an  action  for  a  penalty,  or  for  damages  sustained,  for 
the  sale  of  into.Kicating  liquors  to  her  husband.  By  these 
statutes,  an  act  which  might  otherwise  be  lawful  is  made 
unlawful  and  is  prohibited  under  penalty.  A  servant's  breach 
of  a  statutory  prohibition  of  this  nature,  committed  while 
acting  within  the  scope  of  his  employment,  renders  the  mas- 
ter liable  in  a  civil  action  by  the  person  aggrieved,  for  the 


FOR  CRIMES  OF  SERVANTS.  323 

prescribed  penalty.  Thus,  in  a  Massachusetts  case,^  it  is  said  ; 
"  We  sec  no  reason  why  the  general  principle  wliich  governs 
the  responsibility  of  the  master  for  the  acts  of  his  servant 
should  not  apply  in  the  case  at  bar.  The  action  is  brought 
under  a  statute  which  makes  that  a  tort  which  was  not  so 
before,  and  provides  for  the  recovery  of  damages  against  the 
tort-feasor.  The  tort  consists  in  selling  intoxicating  liquor 
to  one  who  has  the  habit  of  using  it  to  excess,  after  notice  of 
his  habit  and  a  request  from  his  wife  not  to  sell  such  liquor 
to  him.  The  defendant  engages  in  the  business  of  selling 
liquor  voluntarily.  He  chooses  to  intrust  the  details  of  the 
business  to  a  servant.  If  he  forbids  the  making  of  sales  to 
the  intemperate  person,  and  his  servant  negligently,  through 
forgetfulness  of  the  instruction  given  him,  or  through  a  fail- 
ure to  recognize  the  person,  continues  to  make  sales  to  that 
person,  there  is  no  reason  why  the  defendant  should  not  be 
responsible  for  the  wrongful  act.  The  sale  is  his  sale,  made 
in  the  performance  of  his  business,  and  is  an  act  within  the 
general  scope  of  the  servant's  employment." 

So  also  where  statutes  fix  a  penalty  for  the  denial  of  equal 
civil  rights  to  all  persons,  irrespective  of  color,  a  servant 
acting  within  the  scope  of  his  employment  may  render  the 
master  liable  to  the  penalty,  even  though  the  master  directs 
the  servant  to  extend  equal  rights  to  colored  persons.^ 

§  265.     Criminal  liability  generally. 

The  criminal  liability  of  the  principal  is  not  governed  by 
the  same  rules  as  his  civil  liability.  The  presumption  of 
authority  which  arises  from  the  relation  of  the  parties  and 
involves  the  principal  in  liability,  is  counter-balanced  in  the 
criminal  law  by  the  fundamental  notion  that  every  man  is  to 
be  presumed  innocent  until  he  is  proved  guilty.  From  this 
presumption  the  conclusion  is  natural  that  a  criminal  act 
committed  by  the  agent  should  be  presumed  to  be  committed 
contrary  to,  and  not  in  obedience  to,  the  directions  of   the 

1  George  i'.  Gobey,  128  Mass.  289.  See  also  Kreiter  r.  Nichols,  28 
Mich.  496 ;  Bodge  v.  Hughes,  53  N.  H.  614. 

2  Bryan  v.  Adler,  97  Wis.  124. 


324  LIABILITY    OF   MASTER 

principal.  Something  more  than  the  mere  fact  that  the 
agent  was  acting  within  the  scope  of  his  emph)}inont  must 
therefore  be  sliown  in  order  to  make  the  principal  answerable 
in  a  criminal  proceeding  ;  it  must  ordinarily  be  shown  that 
the  crime  was  committed  by  the  principal's  direction  and 
authority,  or  at  least  resulted  from  his  negligence.  "  Crimi- 
nal responsibility  on  the  part  of  the  principal  for  the  act  of 
his  agent  or  servant  in  the  course  of  his  employment,  implies 
some  degree  of  moral  guilt  or  delinquency,  manifested  either 
by  direct  participation  in  or  assent  to  the  act,  or  by  want  of 
proper  care  and  oversight  or  other  negligence  in  reference  to 
the  business  which  he  has  thus  intrusted  to  another."* 

The  general  rule  is,  therefore,  that  a  master  is  not  liable 
criminally  for  an  offence  committed  by  his  servant. 

To  this  general  rule  there  seem  to  be  several  exceptions 
within  somewhat  ill-defiuud  limits,  notably  in  the  case  of  the 
violation  of  revenue  laws,  licensing  laws,  health  hiws,  and  in 
the  case  of  libel  and  nuisance. 

The  exceptions  may  be  stated  as  follows:  A  master  is 
liable  criminally  for  the  criminal  act  of  his  servant  committed 
in  the  course  of  the  employment,  — 

(1)  if  expressly  or  impliedly  the  statute  defining  the 
offence  penalizes  the  proprietor  of  a  business  or  of  property 
in  case  the  prohibited  act  is  done  in  the  conduct  of  his  busi- 
ness or  property  without  reference  to  his  knowledge  or  assent ; 

(2)  if  he  has  authorized,  assented  to,  or  participated  in  the  act; 

(3)  if  by  his  negligent  failure  to  exercise  due  control  over 
the  conduct  of  his  business  or  property  he  has  suffered  the 
act  to  be  done  by  a  servant  in  the  course  of  the  employment. 

§  266.     Absolute  liability. 

Where  the  statute  defining  an  offence  penalizes  one  whose 
business  is  carried  on  in  a  manner  prohibited  by  the  statute, 
it  is  immaterial  whether  the  failure  to  comply  with  the  statu- 
tory requirement  is  due  to  a  personal  default  of  the  proprietor 
of  the  business,  or  to  a  default  on  the  part  of  one  to  whom  he 
has  intrusted  the  conduct  of  the  business.     In  either  case  the 

1  Comm.  I'.  Morgan,  107  Mass.  199.  See  also  Bisliop,  dim.  Law,  "Vol.  1., 
§649. 


FOR   CRIMES   OF   SERVANTS.  325 

proprietor  is  liable  to  the  penalty.  This  may  be  illustrated 
by  reference  to  licensing  laws  and  health  laws. 

Licensing  Laivs,  When  the  state  grants  a  license  to  do 
that  which  without  the  license  would  be  unlawful,  it  may 
impose  a  penalty  for  any  violation  of  the  conditions,  whether 
by  the  licensee  or  by  those  to  whom  he  intrusts  the  conduct 
of  the  husiness.^  It  is  often  a  question  of  nice  construction 
whether  the  law  imposes  an  absolute  liability  to  conduct  the 
business  in  a  particular  way,  or  whether  it  renders  the  licensee 
liable  only  for  an  intentional  violation.^  If  the  former,  then 
the  master  is  liable  for  a  violation  by  his  servant,  even  though 
contrary  to  the  will  and  the  positive  orders  of  the  master ;  ^ 
if  the  latter,  then  the  master  is  liable  only  if  he  knew  of  or 
countenanced  the  violation.*  A  sale  by  an  agent  or  servant 
in  the  ordinary  course  of  the  employment,  but  contrary  to  law, 
makes  a  prima  facie  case  against  the  master  which  the  latter 
may  rebut  by  proof  that  such  sale  was  in  good  faith  for- 
bidden by  him.^ 

Many  cases  have  arisen  in  which  a  master  is  sought  to  be 
held  criminally  liable  for  some  violation  by  his  servant  of  the 
laws  governing  the  sale  of  intoxicating  liquors  and  the  con- 
duct of  the  premises  where  such  sales  are  made.  It  is  quite 
impossible  to  reconcile  all  of  the  cases  under  this  head.  The 
decision  depends  frequently  upon  a  nice  construction  of  the 
language  of  the  statute. 

If  the  statute,  however,  imposes  an  absolute  duty  upon  the 
defendant,  as  the  duty  to  keep  his  saloon  closed  at  certain 
hours,  or  to  place  or  remove  screens  at  certain  hours,  then  a 
violation  of  this  duty  will  render  the  master  liable  to  the 
penalty  although  the  violation  may  be  due  to  the  wilful 
disobedience  of  a  servant.^ 

1  Collman  v.  Mills,  1897,  1  Q.  B.  396. 

^  See  cases  discussed  in  Bond  v.  Evans,  L.  R.  21  Q.  B.  D.  249. 

8  Mullins  V.  CoUins,  L.  R.  9  Q.  B.  292 ;  Bond  v.  Evans,  L.  R.  21  Q.  B. 
D.  249. 

*  Kearley  v.  Tonga,  60  L.  J.  M.  C.  159;  Coram,  v.  Nichols,  10  Met. 
(Mass.)  259 ;  Comm.  v.  Wachendorf,  141  Mass.  270. 

5  State  V.  McCance,  110  Mo.  398. 

6  People  V.  Roby,  52  Mich.  577;  Comm.  v.  Kelley,  140  Mass.  441. 


326  LIABILITY   OF   MASTER 

In  some  jurisdictions  the  statutes  are  so  framed  as  to  make 
a  dealer  liable  for  any  violation  of  the  liquor  laws  upon  his 
premises,  whether  by  his  own  act  or  by  the  act  of  a  servant. 
In  such  case  the  dealer  cannot  escape  liability  by  proving 
that  the  violation  was  contrary  to  his  orders  or  will.^ 

Health  Laws.  Health  laws  to  prevent  the  adulteration  of 
foods,  or  the  sale  of  one  product  under  the  guise  of  another, 
are  very  common.  They  provide  variously  for  private  penal- 
ties, public  penalties,  or  indictment.  The  liability  of  a  master 
for  the  violation  of  the  law  by  his  servant  will  frequently 
depend  upon  the  form  of  the  statute.  In  the  case  of  Rex  v. 
Dixon^  the  defendant  was  indicted  for  using  alum  in  bread 
contrary  to  the  statute  and  convicted  upon  proof  that  the 
alum  was  put  in  the  bread  by  his  foreman.  Under  a  New 
York  statute  providing  that  the  penalty  for  knowingly  sell- 
ing diluted  or  skimmed  milk  should  be  recoverable  by 
the  person  to  whom  it  was  sold,  it  was  held  that  in  an 
action  for  the  penalty,  proof  that  the  defendant's  servants 
in  the  course  of  the  employment,  and  in  his  behalf  or  interest, 
sold  the  skimmed  milk,  warrants  the  jury  in  finding  that  the 
act  was  authorized.^  Under  an  act  providing  that  one 
who  knowingly  sells  oleomargarine,  except  in  duly  marked 
and  stamped  packages,  shall  be  fined  and  imprisoned,  it 
has  been  held  that  proof  of  an  unlawful  sale  at  defendant's 
place  of  business  in  the  usual  course  of  business  by  defend- 
ant's clerk  is  sufficient  evidence  of  a  violation  to  sustain  a 
conviction.'* 

In  many  cases  the  question  is  whether  on  a  fair  construc- 
tion of  the  law  the  master  was  intended  to  be  made  criminally 
liable  for  acts  done  by  a  servant  within  the  scope  of  the  employ- 
ment but  contrary  to  the  orders  and  will  of  the  master.^ 

1  Noecker  v.  People,  91  111.  494;  Carroll  v.  State,  63  Md.  551 ;  McCut- 
cheon  v.  People,  69  111.  601  ;  MuUins  v.  Collins,  L.  11.  9  Q.  B.  292 ;  Bond 
V.  Evans,  L.  II.  21  Q.  B.  D.  249. 

"-  3  M.  &  S.  11. 

8  Verona  Central  Cheese  Co.  v.  Mnrtaugh,  50  N.  Y.  314. 

*  PraUier  v.  United  States,  9  App.  Cas.  D.  C.  82. 

'  Coppen  V.  Moore,  1898,  2  Q.  B.  306. 


FOE   CRIMES   OF   SERVANTS.  327 

§  267.     Authority. 

If  the  act  is  done  by  the  authority  of  the  master  he  is  a 
participant  in  it  and  punishable  as  such.  It  has  been  held, 
however,  that  a  crime  cannot  be  ratified.^  Authority  may 
be  express  or  implied,  and  most  of  the  confusion  in  the 
cases  has  been  due  to  a  difference  in  view,  frequently  unrec- 
ognized as  such,  as  to  the  inference  of  authority  to  be  drawn 
from  the  doing  of  the  criminal  act  by  the  servant  in  the 
course  of  the  employment. 

It  seems  that  proof  of  an  illegal  sale,  whether  it  be  a  sale 
without  a  license,  or  a  sale  under  a  license  but  at  forbidden 
hours  or  to  forbidden  persons,  made  by  defendant's  servant 
in  charge  of  the  defendant's  place  of  business,  may,  if  unex- 
plained, warrant  the  jury  in  inferring  that  the  sale  was  author- 
ized .^  But  it  is  hardly  correct  to  say  that  such  proof  raises 
a  presumption  of  fact,  and  it  may  always  be  rebutted  by  proof 
that  the  sale  was  made  without  the  master's  knowledge,  and 
in  opposition  to  his  will  and  purpose.^ 

If  a  liquor  dealer  in  good  faith  instructs  his  clerks  not  to 
sell  to  minors  but  leaves  them  to  judge  of  minority  by  the 
appearance  of  the  customer,  and  one  sells  to  a  minor,  be- 
lieving him  from  appearance  to  be  an  adult,  it  is  held  that 
the  master  is  not  criminally  liable,  since  there  can  be  no  doubt 
that  there  was  no  authority  to  sell.^ 

In  the  case  of  the  violation  of  revenue  laws,  the  action  by 
the  state  is  frequently  in  the  nature  of  an  action  of  debt 
to  recover  a  penalty.  If  the  act  or  omission  giving  rise 
to  the  proceeding  has  been  the  act  or  omission  of  a  servant 
in  the  course  of  his  employment  the  master  may  be  liable  to 
the  penalty  in  the  same  way  and  for  the  same  reason  as  in  the 
case  of  torts  committed  by  the  servant.  If  the  servant's  act  is 
commanded  or  ratified,  the  case  is  clear.     If  not  commanded 

1  Morse  v.  State,  6  Conn.  9. 

''  Comm.  V.  Nichols,  10  Met.  (Mass.)  259 ,  Comm.  t;.  Briant,  142  Mass. 
463;  Comm.  v.  Wachendorf,  141  Mass.  270. 

s  Ibid. ;  Anderson  v.  State,  22  Oh.  St.  305 ;  Comm.  v.  Stevens,  153 
Mass.  421;  State  v.  McCance,  110  Mo.  398. 

*  Comm.  V.  Stevens,  153  Mass.  421. 


328  LIABILITY   OF   MASTER   FOR   CRIMES   OF   SERVANTS. 

or  ratified,  there  is  still  the  usual  question  whether  the  act  is 
done  in  behalf  of  the  master  and  in  the  course  of  the 
employment.^ 

§  268.     Negligent  failure  to  control. 

The  negligent  failure  to  control  duly  his  business  activities 
may  render  the  master  liable  criminally  for  the  act  of  a 
servant. 

Lihel.  Indictments  for  libel  may  stand  upon  this  basis. 
If  a  libellous  article  is  printed  by  or  for  the  defendant,  or  sold 
at  his  shop,  this  is  prima  facie  evidence  of  his  guilt,^  and  he 
does  not  rebut  this  merely  by  showing  that  he  did  not  know 
of  the  libel  or  authorize  it.^  It  seems  that  in  order  to  escape 
liability  he  must  show  that  he  did  not  know  of  or  authorize 
the  libel  and  that  its  publication  was  not  duo  to  any  want  of 
care  or  caution  on  his  part  in  the  conduct  of  his  business.* 

Nuisance.  Indictments  for  nuisance,  although  criminal  in 
form,  may  be  in  effect  a  kind  of  public  action  for  tort.  This 
is  the  case  where  the  nuisance  is  injurious  to  the  property 
rights  of  many  but,  being  common,  gives  rise  to  no  private 
action  without  proof  of  special  damage.  In  such  case  the 
master  is  liable  upon  evidence  which  would  support  a  civil 
action  for  damages.  Thus  the  owner  of  a  quarry  is  liable 
criminally  for  nuisance  for  tiie  acts  of  his  servants  in  cast- 
ing rubbish  into  a  public  stream,  in  the  course  of  the  employ- 
ment, although  he  may  have  forbidden  them  to  do  so.^  The 
president  and  directors  of  a  company  may  be  convicted  of  a 
nuisance,  although  personally  ignorant  that  it  exists.*" 

*  Attorney-General  v.  Siddon,  1  C.  &  J.  220;  Attorney-General  c. 
Riddle,  2  C.  &  J.  493. 

2  Rex  V.  Almon,  5  Burr.  2086;  Clay  v.  People.  80  111.  147. 

8  Rex  I'.  Gutch,  Mood.  &  Malk.  4:33;  Rex  v.  Walter,  3  Esp.  21.  (But 
see  for  present  English  law,  6  &  7  Vict.  c.  96,  s.  7,  and  R.  v.  Ilolbrook, 
L.  R.  3  Q.  B.  1).  00,  4  Q.  B.  D.  42.) 

*  Comin.  V.  Morgan,  107  Mass.  199;  State  v.  Mason,  26  Ore.  273. 
«  Queen  v.  Stephens,  L.  R.  1  Q.  B.  702. 

«  Rex  V.  Medley,  6  C.  &  P.  292. 


A 


PART  III, 

LIABILITY  OF  MASTER   FOR  INJURIES  TO  SERVANT. 

§  269.     Introductory. 

This  part  deals,  —  (1)  with  the  liability  of  a  master  to  one 
servant  for  an  injury  due  to  the  act  or  omission  of  another 
servant,  and  (2)  with  the  liability  of  a  master  to  a  servant  for 
an  injury  due  to  an  act  or  omission  of  the  master  himself. 
Under  the  first  head  are  discussed  the  subjects  of  "  fellow- 
servants  "  and  "  vice-principals  "  ;  under  the  second  head  the 
general  duties  of  a  master  to  his  servant. 


330  LIABILITY   OF   MASTER 


CHAPTER     XXIY. 

LIABILITY   OF   MASTER   TO    ONE   SERVANT    FOR   TORTS   OF 
ANOTHER    SERVANT. 

§  270.     Classification  of  servants. 

For  our  jtrescut  purpose  wu  may  divide  all  the  servants  of  a 
common  master  engaged  in  a  common  service  into  two  classes, 
namely,  fellow-servants  and  vice-principals.  In  the  first  class 
are  included  all  the  servants  engaged  in  purely  operative  acts, 
while  in  the  second  class  are  included  all  those  to  whom  are 
delegated  what,  for  want  of  a  better  term,  we  may  call  admin- 
istrative acts. 

It  will  be  recalled  that  the  distinction  between  an  agent 
and  a  servant  lies  in  the  nature  of  the  act  to  be  performed. 
An  agent  is  authorized  to  create  new  primary  obligations  ;  a 
servant  is  authorized  to  perform  operative  or  ministerial  acts 
not  intended  to  create  new  primary  obligations.^  So  also 
the  distinction  between  a  fellow-servant  and  a  vice-principal 
lies  in  the  nature  of  the  act  to  be  performed.  If  it  be  an 
operative  act,  the  employee  is  a  fellow-servant  of  all  other 
employees  ;  if  it  be  an  administi'ative  act,  the  employee  is  a 
vice-principal  in  the  sense  that  his  act  is  the  act  of  the 
master. 

It  will  also  be  recalled  that  the  distinction  thus  made 
between  agents  and  servants  leads  to  im})ortant  legal  conse- 
quences in  fixing  the  liability  of  the  employer.^  So  also  the 
distinction  here  made  between  fellow-servants  and  vice- 
principals  leads  to  important  legal  consequences  in  fixing  the 
liability  of  a  master  to  one  servant  for  the  tort  of  another. 

It  will  also  be  recalled  that  the  same  employee  may  be  both 
an  agent  and  servant.^     So  also  the  same  employee  may  be 

1  Anle,  §§  4-G.  2  ^^^te,  §  5.  8  Ayite,  §  6. 


FOE   TORTS   TO    SERVANT.  331 

both  a  fellow-servant  and  a  vice-principal,  for,  since  it  is  tlic 
nature  of  the  act  to  be  performed  that  determines  the  classifi- 
cation and  its  consequences,  it  is  obvious  that  the  same  em- 
ployee may  perform  at  one  moment  an  operative  act  and  at 
another  moment  an  administrative  act.i  A  few  courts, 
indeed,  insist  that  an  employee  whose  chief  duties  are  admin- 
istrative shall  always  be  regarded  as  a  vice-principal  whatever 
act  he  may  happen  to  perform,^  but  this  is  not  in  accord  with 
the  reason  of  the  case  or  with  the  weight  of  authority .^ 

The  term  "  vice-principal "  is  not  in  all  respects  happily 
chosen,  since  it  carries  with  it  a  suggestion  of  the  relation  of 
principal  and  agent,  but  it  is  now  firmly  fixed  and  serves  its 
purpose  if  correctly  understood. 

§  271.     The  fellow-servant  rule. 

To  the  rule  that  a  master  is  liable  for  the  torts  of  his  ser- 
vant committed  within  the  scope  of  the  employment,  there  is 
one  highly  important  exception,  known  as  the  "  fellow-servant 
rule."     This  exception  may  be  stated  as  follows :  — 

A  master  is  not  liable  for  personal  injuries  occasioned  to 
one  servant  by  the  tort  of  a  fellow-servant  employed  in  the 
same  common  service,  unless  (1)  the  fellow-servant  is  acting 
as  a  deputy-master  or  vice-principal,'*  or  (2)  the  master  has' 
negligently  selected  an  incompetent  fellow-servant,  or  negli-j 
gently  retained  one,^  or  (3)  by  statute  the  master  is  madq 
liable  to  one  servant  for  the  wrongful  act  or  default  of  i 
fellow-servant.^ 

Various  reasons  have  been  given  for  this  exception,  the 
most  generally  accepted  being  that  there  is  in  every  such 
contract  of  employment  an  implied  terra  that  the  servant 
shall  assume  all  the  ordinary  risks  of  the  business,  including 
the  negligence  of  fellow-servants  under  the  limitations  indi- 
cated above.^     But  this  is  rather  an  attempted  assimilation  of 

1  Post,  §  276.  2  Post,  §  275.  »  Post,  §  276. 

*  Post,  §  274.  For  convenience  and  simplicity  this  is  put  in  the  form 
of  an  exception  to  the  general  rule. 

5  Post,  §  278. 

6  Post,  §  279. 

'  "  When  a  man  enters  into  the  service  of  a  master,  he  tacitly  agrees 


332  LIABILITY   OF   MASTER 

the  exception  to  recognized  legal  conceptions  than  a  reason 
or  an  explanation  for  the  existence  of  the  exception.  Why 
such  a  tacit  term  should  be  read  into  every  contract  of  em- 
ployment remains  unexplained  except  upon  an  antecedent 
theory  that  it  is  good  general  policy,  serving  useful  social 
and  industrial  ends,  that  it  should  be  so.^  Whether  such  a 
theory  is  well  founded  it  is  now  too  late  to  inquire  except  in 
the  consideration  of  remedial  legislation.  As  a  rule  for  the 
guidance  of  courts  in  the  administration  of  justice  the  excep- 
tion is  firmly  established  and  is  universally  applied,  though 
not  without  important  divergences  in  interpretation  and  in  its 
application  to  particular  sets  of  facts,  as,  for  instance,  in  the 
meaning  of  "  common  service"  and  "  deputy-master  or  vice- 
principal,"  and,  in  general,  in  the  determination  in  special 
instances  of  who  are  and  who  are  not  "fellow-servants." 

§  272.     Evolution  of  the  rule. 

The  earliest  case  suggesting  the  fellow-servant  rule  is  that 
of  Priestley  v.  Foivler^  decided  in  1837  in  the  English  Court 
of  Exchequer,  but  the  question  was  not  necessarily  involved 
in  the  decision  of  that  case.  The  earliest  actual  decision  was 
in  the  case  of  Murray  v.  South  Carolina  Railroad  Company^ 
handed  down  by  the  Court  of  Errors  of  South  Carolina  in 
1841.  The  leading  American  case  is  that  of  Farwell  v.  Boston 
and  Worcester  Railroad  Company^  decided  by  the  Supreme 
Judicial  Court  of  Massachusetts  in  1842  in  an  able  opinion  by 
Chief-Justice  Shaw,  and  followed  in  the  other  jurisdictions.^ 

to  take  upon  himself  to  bear  all  ordinary  risks  wliicli  are  incident  to 
his  employment,  and,  amongst  otliers,  the  possibility  of  injury  happening 
to  him  from  the  negligent  acts  of  his  fellow-servants  or  fellow-workmen." 
Archibald,  J.,  in  Lovell  v.  Howell,  1  C.  P.  D.  Kil. 

1  Farwell  i\  Boston  &  Worcester  R.,  4  Met.  (Mass.)  40. 

2  3  M.  &  W.  1.  Followed  in  Hutchinson  v.  York,  5  Exch.  313;  Tar- 
rant».  Webb,  18  C.  B.  797;  Morgan  r.  Vale  of  Neath  R.,  L.  R.  1  Q.  B. 
149,  and  subsequent  cases.  Adopted  for  Scotland,  Bartonshill  Coal  Co. 
V.  Reid,  3  Macq.  H.  L.  266. 

8  1  McMull.  Law,  385. 
4  4  Met.  49. 

6  Brown  v.  Maxwell  (1S44),  6  Hill  (X.  Y.),  .592 ;  Coon  v.  Syracuse, 
&c.  R.  (1851),  6  Barb.  231,  affirmed,  5  N.  Y.  492;  Ryan  v.  Cumberland 


FOR   TOUTS   TO   SERVANT.  333 

In  the  Murray  Case  the  action  was  by  a  fireman  for  injuries 
sustained  by  the  negligence  of  the  engineer,  and  it  was  held 
by  the  majority  of  the  court  (seven  to  three)  that  it  was  not 
incident  to  the  contract  of  employment  that  the  company 
should  guarantee  him  against  the  negligence  of  a  co-servant, 
and  that  such  negligence  was  one  of  the  risks  assumed  by  the 
plaintiff.  In  the  Farwell  Case  the  action  was  by  an  engineer 
for  injuries  occasioned  by  the  negligence  of  a  switchman,  and 
it  was  held  that  "  he  who  engages  in  the  employment  of 
another  for  the  performance  of  specified  duties  and  services, 
for  compensation,  takes  upon  himself  the  natural  and  ordinary 
risks  and  perils  incident  to  the  performance  of  such  services, 
and  in  legal  presumption,  the  compensation  is  adjusted 
accordingly  ;  and  we  are  not  aware  of  any  principle  which 
should  except  the  perils  arising  from  the  carelessness  and 
negligence  of  those  who  are  in  the  same  employment."  It  is 
argued  that  each  servant  is  an  observer  of  the  conduct  of  the 
others  and  can  give  notice  of  any  misconduct,  incapacity,  or 
neglect,  and  can  leave  the  service  in  case  the  employer  con- 
tinues such  incompetent  servants.  The  argument  that  the 
servants  were  in  different  departments  and  therefore  the  rule 
of  observing  and  influencing  the  conduct  of  each  other  ought 
not  to  apply,  was  dismissed  as  one  likely  to  lead  to  great 
inconvenience  in  specific  cases.  Finally  the  whole  matter  is 
placed  upon  the  docti'ine  that  "  the  implied  contract  of  the 
master  does  not  extend  to  indemnify  the  servant  against  the 
negligence  of  any  one  but  himself ;  and  he  is  not  liable  in 
tort,  as  for  the  negligence  of  his  servant,  because  the  person 
suffering  does  not  stand  toward  him  in  the  relation  of  a 
stranger,  but  is  one  whose  rights  are  regulated  by  contract 
express  or  implied." 

In  the  leading  New  York  case  of  Coon  v.  Tlie  Si/racuse  and 
Utica  Bailroad,^  a  track  repairer  was  injured  through  the  neg- 

R,,  23  Pa.  St.  384;  Mad  River,  &c.  R.  v.  Barber,  5  Oh.  St.  511;  Ilonner 
».  111.,  &c.  R.,  15  111.  550;  Madison  R.  v.  Bacon,  6  Ind.  205;  Sullivan  r. 
Miss.,  &c.  R.,  11  Iowa,  421;  Fraker  v.  St.  Paul,  &c.  R.,  32  Minn.  54; 
Cooper  V.  Milwaukee,  &c.  R.,  23  Wis.  668. 
1  5  N.  Y.  492,  affirming  6  Barb.  231. 


334  LIABILITY    OF   ^L\STER 

lio-encc  of  trainmen,  and  it  was  held  he  could  not  recover,  the 
court  contenting  itself  with  resting  upon  the  authority  of  the 
English,  South  Carolina,  and  Massachusetts  cases.  Later 
Xcw  York  cases  accept  the  rule  as  unquestioned. ^ 

In  the  leading  Pennsylvania  case  of  Riinn  v.  Cumlerland 
Valley  Railroad  Company'^  a  track  laborer  while  riding  to  his 
work  on  a  gravel  train  was  injured  by  the  negligence  of  the 
engineer  or  conductor,  and  it  was  held  that  he  could  not 
recover  from  the  company.  The  court  (two  judges  dissent- 
ing) follows  the  earlier  cases,  saying,  "  Where  we  find  a  road 
BO  well  beaten,  it  is  easy  to  follow  it,  and  its  beaten  character 
is  an  indication  that  we  may  follow  it  with  safety.  The  rule 
announced  by  these  cases  is,  that  where  several  persons  are 
employed  in  the  same  general  service,  and  one  is  injured  from 
the  carelessness  of  another,  the  employer  is  not  responsiljle." 
The  court  then  argues  that  the  rule  is  one  of  convenience  and 
necessary  to  the  proper  conduct  of  business  enterprises. 

The  rule  laid  down  in  these  leading  cases  has  been  adhered 
to  in  those  jurisdictions  and  followed,  with  slight  variations, 
in  others.  The  English  and  Massachusetts  cases  were  imme- 
diately discussed  in  Story  on  Agency ,3  and  through  this  classic 
the  fellow-servant  doctrine  was  heralded  to  the  profession  at 
large  and  received  general  recognition  from  the  courts. 

Such  variations  of  the  rule  as  are  found  in  a  few  states  are 
rather  the  result  of  the  shifting  application  of  the  rule  than 
of  any  essentially  different  statement  of  it.  Such  are  the 
"  superior  officer "  doctrine  of  Ohio,*  Nebraska,^  and  one  or 
two  other  states  ;  ^  and  the  "  different  department "  doctrine 
of  Illinois,"  Missouri,^  and  some  other  states.^ 

1  Ru.ssell  V.  Hudson  Riv.  R.  Co.,  17  N.  Y.  134;  Sherman  v.  Rochester, 
&c.  R.,  17  N.  Y.  153 ;  Wright  v.  New  York  Cent.  R.,  25  N.  Y.  562  ;  Cris- 
pin V.  Babbitt,  81  N.  Y.  516. 

2  23  Pa.  St.  381  (1854). 

8  2(1  ed.,  1813;  3d  ed.,  1816,  §§  453  fM53/. 
*  Little  Miami  R.  i;.  Stevens,  20  Ohio,  415. 
6  Union  Pac.  R.  v.  Doyle,  50  Neb.  5.')5. 

6  Armstrong  v.  Oregon,  &e.  R.,  8  Utah,  420;  Richmond,  &c.  R.  v. 
Williams,  86  Va.  165 ;  Nix  v.  Texas,  &c.  R.,  82  Tex.  473. 

7  Chicago,  &c.  R.  v.  Moranda,  93  111.  302. 

8  Dixon  V.  Chicago,  &c.  R.,  109  Mo.  413.  «  Post,  §  273. 


FOR   TORTS   TO   SERVANT.  335 

The  rule  is  of  comparatively  modern  origin,  but  its  almost 
universal  acceptance  would  seem  to  indicate  that  it  rests  on 
some  substantial  considerations  of  public  policy  that  have 
constrained  courts  everywhere  to  follow  it.  It  has  been 
modified,  however,  in  some  jurisdictions  by  legislative  action, 
of  which  more  hereafter.^ 

§  273.     "Fellow-servants  employed  in  the  same  common  service." 

In  order  that  the  rule  should  apply  it  is  necessary  that  the 
servant  injured  and  the  servant  at  fault  should  be  fellow-ser- 
vants employed  in  the  same  service.  They  must  have  a 
common  master,  and  for  this  reason  it  has  been  held  that  the 
employees  of  a  palace-car  company  are  not  fellow-servants  of 
the  railj-oad  company  that  hauls  the  palace  car  as  a  part  of 
its  passenger  train.^  This  excludes  from  the  category  an 
independent  contractor  ^  and  the  servants  of  such  contractor 
in  their  relation  to  the  servants  of  the  employer  of  the  inde- 
pendent contractor'^  or  to  the  servants  of  another  independent 
contractor  engaged  by  the  same  employer.^  It  also  excludes, 
for  another  reason,  compulsory  servants,  like  pilots  ^  and 
convicts,^  since  such  servants  not  being  free  to  contract 
cannot  be  said  to  have  contracted  to  assume  the  risks  of  the 
negligence  of  those  with  whom  they  are  compelled  to  work. 

On  the  other  hand  there  may  be  such  a  transfer  of  service 
for  the  time  being  as  to  render  the  general  servant  of  A 
temporarily  the  servant  of  B  and  the  fellow-servant  of  B's 
servants.^ 

So  a  volunteer  assumes  the  same  risks  as  a  servant  by 
contract,  and  becomes,  therefore,  while  so  volunteering,  a 
fellow-servant  of  the  regular  servants  of  the  person  in  whose 

1  Post,  §  279. 

2  Jones  V.  St.  Louis  S.  W.  Ry.,  125  Mo.  668;  Hughson  v.  Richmond, 
&c.  R.  R.,  2  D.  C.  App.  Cas.  98. 

8  Ante,  §  218  et  seq. 

*  Murray  v.  Dwight,  161  N.  Y.  301. 

6  Johnson  v.  Lindsay,  1891,  A.  C.  371. 

6  Smith  V.  Steele,  L.  R.  10  Q.  B.  125.     See  ante,  §  236. 

7  Buckalew  v.  Tennessee  Coal  Co.,  112  Ala.  146.     Ante,  §  236. 

8  Ewan  V.  Lippincott,  47  N.  J.  L.  192.     See  ante,  §  228  et  seq. 


336  LIABILITY   OF   MASTER 

interest  he  volunteers.^  Perhaps  tlie  better  doctrine  is  that 
the  vohintcer  is  not  a  servant  at  all,  and  assumes  all  the  risks 
of  the  situation  except  that  of  wanton  injury .^ 

The  term  fellow-servant  also  excludes  such  servants  as, 
under  the  test  to  be  aj)i)lied  in  a  particular  jurisdiction,  fall 
within  the  category  of  deputy-master  or  vice-princij)al.^ 

"  Employed  in  the  same  common  service  "  has  a  narrower 
meaning  than  "  employed  by  the  same  master,"  since  the 
same  person  may  be  engaged  in  two  or  more  enterprises 
which  have  no  essential  relation  to  each  other,  or  different 
departments  of  the  same  general  business  may  be  so  dis- 
sociated as  to  be  regarded  as  constituting  different  enter- 
prises. An  attempt  has  been  made  to  refine  upon  this  notion 
in  such  a  way  as  to  cut  up  the  railroad  business  into  different 
departments  and  exclude  from  the  fellow-servant  rule  em- 
ployees working  in  such  different  departments.  This  attempt 
has  been  successful  in  a  few  states,*  but  it  is  generally  held 
that  the  railway  employee  assumes  the  risk  of  negligence  in 
any  department  and  that  the  whole  business  must  be  regarded 
as  constituting  one  enterprise.^  The  general  rule,  outside  of 
the  states  where  the  "  different  department "  doctrine  pre- 
vails, is  that  servants  are  engaged  in  the  same  common 
service  whenever  each  might  reasonably  foresee,  when  engag- 
ing in  the  employment,  that  the  negligence  of  the  others  is  a 
risk  to  be  encountered  in  the  course  of  such  service.  This 
brings  the  test  fairly  within  the  reason  of  the  fellow-servant 
rule,  namely,  that  a  servant  undertakes  the  ordinary  risks  of 
the  service  including  the  negligence  of  other  servants.  The 
"different  department"  doctrine  is  a  logical  extension  of 
another  reason  given  for  the  fellow-servant  rule,  namely,  that 

1  Osborne  v.  Knox,  68  Me.  49. 

2  Church  V.  Chicago,  &c.  R.,  50  Minn.  218.     Ante,  §  240. 
8  Post,  §  274. 

*  Chicago,  &c.  R.  v.  Moranda,  93  111.  302 ;  Dixon  v.  Chicago,  &c.  R., 
109  Mo.  413 ;  Atchison,  &c.  R.  v.  ]\IcKee,  37  Kans.  592  ;  Union  Pac.  R.  v. 
Erickson,  41  Neb.  1;  Armstrong  r.  Oregon,  &c.  R.,  8  Utah,  420. 

*  Northern  Pac.  R.  r.  Ilanibly,  154  U.  S.  349,  and  cases  there  cited: 
Wright  V.  New  York  Central  R.  Co.,  25  N.  Y.  562  j  Bjodeur  v.  Valley 
Falls  Co.,  16  R.  I.  448. 


FOR  TORTS   TO   SERVANT.  337 

a  servant  is  in  a  better  position  than  the  master  to  ascertain 
and  guard  against  the  negligence  of  those  with  whom  he  is 
employed :  clearly  this  could  apply  only  to  those  cases  where 
he  is,  cither  generally  or  in  a  particular  case,  actually  associated 
with  the  negligent  servant  in  such  a  way  as  to  be  able  to  ob- 
serve him  and  to  exercise  some  influence  over  his  conduct.^ 

Under  the  general  rule  a  track  repairer  is  the  fellow-servant 
of  a  trainman,^  while  under  the  "different  department"  doc- 
trine he  is  not.^  Under  the  general  rule  a  baggageman  and 
an  engineer  are  fellow-servants,  while  under  the  special  rule 
they  have  been  held  not  to  be  so,  although  both  are  employed 
upon  the  same  train,^ 

It  is  everywhere  admitted  that  two  servants  of  the  same 
master  may  be  engaged  in  such  totally  different  undertakings 
that  neither  can  fairly  be  regarded  as  having  assumed  the 
risk  of  the  negligence  of  the  other.  Thus  where  M  is  engaged 
in  the  ocean  carrying  trade,  the  seamen  on  one  of  his  vessels 
are  not  to  be  regarded  as  the  fellow-servants  of  the  seamen 
on  another  of  his  vessels.^  It  is  equally  clear  that  under  the 
general  rule  the  trainmen  on  one  railway  train  are  the  fellow- 
servants  of  the  trainmen  on  another.^  Between  these  extremes 
one  might  suggest  the  case  of  the  servants  on  two  ferry  boats 
run  by  the  same  master  and  plying  between  the  same  points. 

The  driver  of  a  wagon  employed  in  a  master's  meat  busi- 
ness is  not  in  the  same  common  service  with  a  hod- carrier 
employed  by  tlie  same  master  in  the  construction  of  a  building 
intended  for  the  extension  of  such  meat  business.'^ 

Where  one  railway  company  runs  its  cars  over  the  tracks 
of  another,  the  employees  of  the  latter  are  not  fellow-servants 
of  the   employees  of  the   former.^     So   an  employee   on  a 

1  See  Chicago,  &c.  R.  v.  Swan,  176  111.  424. 

2  Coon  V.  Syracuse,  &c.  R.,  5  N.  Y.  492. 

8  Chicago,  &c.  R.  v.  Moranda,  93  111.  302. 
*  Chicago,  &c.  R.  v.  Swan,  176  111.  424. 
6  The  Petrel,  1893,  P.  320. 
6  Oakes  v.  Mase,  165  U.  S.  363. 
'  McTaggart  v.  Eastman's  Co.,  28  N.  Y.  Misc.  127. 
8  Smith  V.  New  York,  &c.  R.,  19  N.  Y.  127 ;  Murphy  v.  New  York, 
&c.  R.,  118  N.  Y.  527. 

22 


338  LIABILITY   OF   MASTER 

liglitercr  is  not  a  fellow-servant  of  the  seamen  on  a  vessel 
employing  the  ligliterer.i  Generally  in  an  action  against  a 
third  person  (not  the  master)  the  concurring  negligence  of  a 
fellow-servant  of  the  plaintiff  will  not  bar  a  recovery .2 

§274.     First  exception.  —  The  vice-principal  doctrine. 

The  rule  then  is  that  the  master  is  not  liable  for  i)crsonal 
injuries  occasioned  to  one  servant  by  the  tort  of  a  fellow- 
servant  employed  in  the  same  common  service.  But  the 
master  is  liable  for  his  own  negligence  resulting  in  personal 
iujuncs  to  his  servant.'^  lie  is  also  liable  for  the  negligence 
of  his  dei)uty  resulting  in  injuries  to  his  servant.  This 
deputy  is  known  in  the  law  as  a  vice-principal,  and  it  now 
becomes  necessary  to  ascertain  who  is,  and  who  is  not,  a 
vice-principal. 

At  least  two  pretty  well-defined  tests  have  been  applied  for 
the  solution  of  this  problem:  (1)  that  one  is  a  vice-principal 
who  has  general  superintendence  and  control  of  a  business,  or 
of  some  defined  department  of  a  business,  and  that  a  servant 
under  his  control  and  direction  is  not  his  fellow-servant^;  (2) 
that  one  is  a  vice-principal  who  is  engaged  in  performing  for 
the  master  an  administrative  act  which  the  law  docs  not  per- 
mit the  latter  to  assign  to  any  one,  and  that  one  so  performing 
a  non-assignable  act  is  not  the  fellow-servant  of  any  other 
employee.^  It  will  be  observed  that  the  first  test  regards  the 
rank  and  authority  of  the  employee  as  decisive,  while  the 
second  test  regards  the  character  of  the  act  performed,  and 
not  rank  or  authority,  as  decisive.  The  first  may  be  called 
the  "  superior  officer  test "  and  the  second  the  "  non-assign- 
able duty  test." 

1  Svenson  v.  A.  M.  S.  Co.,  57  N.  Y.  108. 

2  Seaman  v.  Koehler,  122  N.  Y.  646;  Perry  v.  Lansing,  17  llun 
(N.Y.),  34. 

8  Post,  §  280  et  acq. 

<  Little  Miami  R.  Co.  v.  Stevens,  20  Ohio,  415;  Union  Pac.  R.  Co.  v. 
Doyle,  50  Neb.  555  ;  Moon  v.  Richmond,  &c.  R.,  78  Va.  715. 

5  Crispin  v.  Babbitt,  81  N.  Y.  516 ;  New  p:iigland  R.  Co.  v.  Conroy, 
175  U.  S.  323. 


FOR  TORTS   TO   SERVANT.  339 

§  275.     Same.  —  The  superior  officer  test. 

The  superior  ofiicer  test  seems  to  have  had  its  origin  in  the 
case  of  Little  Miami  Railroad  v.  Stevens '  decided  by  the  Su- 
preme Court  of  Ohio  in  1851,  and  has  been  most  fully  worked 
out  and  explained  by  that  court.  As  stated  in  a  recent  case 
the  doctrine  is  that, "  The  implied  obligation  of  the  servant  to 
assume  all  risks  incident  to  the  employment,  including  that  of 
injury  occasioned  by  the  negligence  of  a  fellow-servant,  has 
no  application  where  the  servant  by  whose  negligent  conduct 
or  act  the  injury  is  inflicted,  sustains  the  relation  of  a  superior 
in  authority  to  the  one  receiving  the  injury.  .  .  .  Where  one 
servant  is  placed  by  his  employer  in  a  position  of  subordina- 
tion to,  and  subject  to  the  orders  and  control  of  another,  and 
such  inferior  servant,  without  fault,  and  while  in  the  discharge 
of  his  duties,  is  injured  by  the  negligence  of  the  superior  ser- 
vant, the  master  is  liable  for  such  injury."  ^  Nebraska  also 
follows  this  doctrine.^ 

This  rule,  with  some  confusing  variations,  has  been  adopted 
in  whole  or  in  part  in  a  few  other  states.  In  Illinois  it  is 
adopted  to  this  extent,  namely,  that  the  master  is  liable  to  an 
inferior  servant  for  the  negligence  of  a  superior  servant,  pro- 
vided the  superior  is  negligent  in  the  exercise  of  the  power 
over  the  inferior  conferred  upon  him  by  the  master,  "  If 
the  negligence  complained  of  consists  of  some  act  done  or 
omitted  by  one  having  such  authority,  which  relates  to  his 
duties  as  a  co-laborer  with  those  under  his  control,  and  which 
might  just  as  readily  have  happened  with  one  of  them  having 
no  such  authority,  the  common  master  will  not  be  liable.  .  .  . 
But  when  the  negligent  act  complained  of  arises  out  of,  and 
is  the  direct  result  of  the  exercise  of,  the  authority  conferred 
upon  him  by  the  master  over  his  co-laborers,  the  master  will 
be  liable."  *  In  Texas  it  is  adopted  subject  to  the  additional 
qualification   that  the  superior  must  have  authority  to  hire 

1  20  Ohio,  415. 

2  Berea  Stone  Co.  v.  Kraft,  31  Oh.  St.  287,  291-292. 
8  Union  Pac.  R.  v.  Doyle,  50  Neb.  555. 

4  Chicago  &  Alton  R.  v.  May,  108  111.  288;  Meyer  v.  111.  Cent.  R., 
177  111.  591. 


340  LIABILITY   OF   MASTER 

and  discharge  the  inferior.^  In  Kentucky  the  master  is  liable 
if  the  superior  servant  was  "  grossly  "  negligent,  but  not  other- 
wise.'-^ In  several  other  states  the  Ohio  rule  is  recognized  to 
some  extent.''  The  great  weight  of  judicial  authority  is,  how- 
ever, opposed  to  this  test. 

By  statutes  in  several  jurisdictions  the  superior  officer  test 
is  made  a  part  of  the  positive  law.  Thus  the  "■  Employers' 
Liability  Acts  "  malve  the  master  liable  for  the  negligence  of 
any  j)erson  in  the  service  who  has  any  superintendence  and 
while  exercising  such  superintendence,  or  of  any  person  in  the 
service  to  whose  orders  or  directions  the  workman  at  the  time 
of  the  injury  was  bound  to  conform  and  did  conform  to  his 
injury,  or  (beyond  this  test)  of  any  person  in  the  service  who 
has  charge  or  control  of  any  signal,  switch,  locomotive  engine, 
or  train,  etc.,  upon  any  railway.*  In  some  states  similiar  acts 
exist  applicable  only  to  railroads.^  In  other  states  the  fellow- 
servant  rule  is  either  totally  abolished  as  to  railroads  or  mate- 
rially modified.^ 

§276.     Same. — The  non-assignable  duty  test. 

Most  of  the  American  jurisdictions  recognize  and  apply  the 
"non-assignable  duty"  test  in  determining  who  is  or  who  is 
not  a  vicc-i)rincipal.     This  test  has  its  foundation  in  the  con- 

1  Missouri  Pac.  R.  v.  Williams,  75  Tex.  4;  Nix  v.  Texas,  &c.  R.,  82 
Tex.  473. 

2  Louisville,  &c.  R.  v.  Collins,  2  Duv.  114  ;  Greer  v.  Louisville,  &c.  R., 
94  Ky.  109. 

8  Moor  V.  Railroad,  85  Mo.  588;  Russ  v.  Wabash  W.  Ry.,  112  Mo. 
45;  Mason  v.  Richmond,  &c.  R.,  Ill  N.  C.  452,  s.  c.  114  N.  C.  718; 
Railroad  w.  Spence,  93  Tenn.  173  ;  Electric  Ry,  r.  Lawson,  101  Tenn.  406; 
Andreson  i\  Ogden,  &c.  Co.,  8  Utah,  128;  Armstrong  v.  Railway  Co., 
8  Utah,  420. 

*  43  &  44  Vict.  c.  42 ;  Alabama  Code,  §§  2590-2592  ;  Colorado  L.,  1893, 
c.  77;  Indiana  Acts,  1893,  c.  130;  Massachusetts  Acts,  1S94,  c.  499. 
See  Utah  L.,  189G,  c.  24.     Post,  §  279. 

6  Arkansas  Statutes,  §§  6248-6250;  Mississippi  Const.,  §  193;  Ohio 
L.  1890,  p.  149,     Post,  §  279. 

«  Florida  L.  of  1891,  c.  4071;  Georgia  Code,  §  3036;  Iowa  Code, 
§  1307 ;  Kansas  L.  1874,  c.  93 ;  Wisconsin  L.  of  1893,  c  220,  Post, 
§279. 


FOR   TORTS    TO    SERVANT.  341 

ception  that  a  master  owes  to  his  servants  certain  duties  for 
the  proper  performance  of  which  he  remains  always  liable  ir- 
respective of  whether  he  performs  them  in  person^  or  through 
representatives ;  or,  to  put  it  in  another  way,  the  servant  does 
not  assume  the  risk  of  the  due  performance  of  these  duties 
even  though  he  is  aware  that  they  are  to  be  performed  by  a 
co-servant.  In  order  to  grasp  this  test  it  is  necessary  first  to 
enumerate  the  duties  which  the  master  owes  to  his  servants 
and  for  the  due  performance  of  which  he  remains  always 
liable. 

A  master  is  bound  to  use  due  care,  either  personally  or 
through  a  vice-principal,  to  provide  and  maintain  :  — 

(1)  A  sufficient  number  of  competent  servants  ;2 

(2)  Suitable  instrumentalities,  including  a  safe  place  to 
work  and  safe  tools  and  appliances;^ 

(3)  Suitable  inspection  of  such  instrumentalities;* 

(4)  Suitable  general  rules  and  regulations  for  the  govern- 
ment of  the  service ;  ^ 

(5)  Suitable  special  orders  necessary  to  the  safety  of  the 
service ;  ^ 

(6)  Suitable  warning  of  any  unusual  or  extraordinary 
risk ;  ^ 

(7)  Suitable  supervision  necessary  to  meet  the  above  re- 
quirements.^ 

Any  servant,  whatever  his  grade  or  rank,  to  whom  the 
master  delegates  the  performance  of  any  of  the  above  duties 
is  a  vice-principal   while   engaged  in  such  performance,  al- 


'oO 


1  See  post,  §  282. 

2  Flike  r.  Boston  &  A.  R.,  53  N.  Y.  549 ;  Coppins  v.  New  York  Cent. 
&c.  R.,  122  N.  Y.  557 ;  Wabash  Ry.  v.  McDaniels,  107  U.  S.  454. 

8  Fuller  V.  Jewett,  80  N.  Y.  46;  Ford  v.  Fitchburg  R.,  110  Mass.  240. 
4  Bailey  v.  Rome,  &c.  R.,  139  N.  Y.  302 ;  Nord  Deutscher,  &c.  Co.  v.      ^ 
Ingebregsten,  57  N.  J.  L.  400.     Cf.  Cregan  v.  Marston,  126  N.  Y.  568.       Q^ 

6  Abel  V.  Delaware  &  H.  C.  Co.,  103  N.  Y.  581 ;  Ibid.  128  N.  Y.  662. 
8  Hankins  v.  New  York,  &c.  R.,  142  N.  Y.  416. 

7  Mather  v.  Rillston,  156  U.  S.  391;  Fox  v.  Peninsular  Lead  Works, 
84  Mich.  676;  Smith  v.  Oxford  Iron  Co.,  42  N.  J.  L.  467. 

8  AVhittaker  v.  D.   &   H.   C.   Co.,   126  N.  Y.  544;    Wabash  Ry.   v. 
McDaniels,  107  U.  S.  454. 


342  LIABILITY    OF   MASTER 

though  as  to  his  other  duties  he  may  be  a  fellow-scrvaait.^  Any 
servant,  whatever  his  grade  or  rank,  who  is  engaged  in  an 
operative  act,  as  distinguished  from  one  of  the  above  prepara- 
tive or  rcguKative  acts,  is  a  fellow-servant  and  not  a  vice-prin- 
cipal, although  as  to  his  duties  generally  he  may  be  a 
vice-principal.-  In  other  words,  the  nature  of  the  act,  and 
not  the  grade  or  rank  of  the  actor,  constitutes  the  test.  The 
situation  is  much  the  same  as  if  the  statutes  prescribed  that 
every  employer  should  observe  the  above  requirements,  in 
which  case  it  would  be  no  answer  that  the  neglect  to  do  so 
was  the  neglect  of  the  fellow-servant  of  the  plaintiff.^ 

The  leading  case  is  Crispin  v.  Babbitt^  where  it  appears 
that  a  general  superintendent  or  head  man  of  defendant's  iron 
works  negligently  let  on  steam  and  started  a  wheel  on  which 
plaintiff  was  at  work.  It  was  held  that  this  was  an  operative 
act  and  not  the  performance  of  any  non-assignable  duty,  and 
that  the  superintendent  was,  therefore,  in  the  doing  of  that  act, 
the  fellow-servant  of  the  plaintiff.  "  The  liability  of  the 
master  does  not  depend  upon  the  grade  or  rank  of  the  em- 
ployee whose  negligence  causes  the  injury.  A  superintendent 
of  a  factory,  although  having  power  to  employ  men,  or  repre- 
sent the  master  in  other  respects,  is,  in  the  management  of 
the  machinery,  a  fellow-servant  of  the  other  operatives.  On 
the  same  principle,  however  low  the  grade  or  rank  of  the  em- 
ployee, the  master  is  liable  for  injuries  caused  by  him  to  an- 
other servant,  if  they  result  from  the  omission  of  some  duty  of 
the  master,  which  he  has  confided  to  such  inferior  employee." 
The  rule  thus  laid  down  has  been  accepted  by  the  United 
States  Supreme  Court,^  and  by  the  courts  of  upwaids  of  thirty 
states.^ 

It  will  be  observed  that  the  rule  has  two  aspects   in   its 

^  Northern  Pac.  K.  v.  Herbert,  116  U.  S.  642;  cases  cited  supra. 

2  Crispin  r.  Babbitt,  81  N.  Y.  516. 

8  New  York,  &c.  K.  v.  Lainbright,  5  Oli.  Cir.  Ct.  R.  433. 

*  81  N.  Y.  516. 

*  Central  R.  v.  Keegan,  160  U.  S.  259  ;  New  England  R.  v.  Conroy, 
175  U.  S.  323,  overruling  Chicago,  &c.  R.  v.  Ross,  112  U.  S.  377. 

8  See  1  Sh.  &  Red.  on  Neg.,  §  232 ;  12  Am.  &  Eng.  Ency.  of  Law  (2d 
ed.),  pp.  948-970. 


FOR  TORTS   TO   SERVANT.  343 

application  to  concrete  facts :  (1)  An  employee  whose  duties 
arc  mainly  those  of  a  vice-principal  may  by  the  doing  of  an 
operative  act  become  a  fellow-servant ;  ^  (2)  An  employee 
whose  duties  are  mainly  operative  may  by  being  intrusted 
with  the  performance  of  a  non-assignable  duty  become  a  vice- 
principal.2  It  follows  that  the  same  servant  may  occupy  a 
dual  position,  and  be  at  one  moment,  in  the  performance  of  one 
act,  a  vice-principal,  and  the  next  moment,  in  the  performance 
of  another  act,  a  fellow-servant.  The  superior  othcer  test  is 
antagonistic  to  the  first  aspect  of  the  non-assignable  duty  test, 
but  not  to  the  second.  A  superior  officer  is  in  Ohio  a  vice- 
principal,  even  though  performing  an  operative  act.^  But  an 
operative  might,  conceivably,  become  a  vice-principal  also  if 
performing  a  non-assignaV)le  duty.*  In  other  words  the  second 
aspect  of  the  non-assignable  duty  test  may  be  united  to  the 
superior  officer  test  (as  it  is  in  Illinois)  °  and  thus  make  the 
most  liberal  common  law  rule  in  favor  of  the  servant. 

Certain  employees  are,  as  to  their  ordinary  duties,  vice- 
principals,  and  a  default  upon  their  part  as  to  those  duties  is 
a  default  of  the  master.  A  president  of  a  corporation,^  a 
superintendent,''  a  train  despatcher,^  or  a  regular  car  inspec- 
tor,^ and  other  superior  officers  charged  with  administrative 
duties,  are  as  to  such  duties  vice-principals ;  but  if  they  tem- 
porarily perform  operative  acts  they  are  fellow-servants.^'^  On 
the  other  ha.nd  conductors  of  railway  trains,^^  engineers,^^  and 

1  Donnelly  v.  San  Francisco  Bridge  Co.,  117  Cal.  417;  Crispin  v. 
Babbitt,  81  N.  Y.  516. 

2  Nixon  V.  Selby,  &c.  Co.,  102  Cal.  458. 

3  Berea  Stone  Co.  v.  Kraft,  31  Oh.  St.  287. 

*  IMobile,  &c.  R.  v.  Godfrey.  155  Til.  78,  a  jurisdiction  that  also  holds 
to  the  superior  officer  test  (Chicago  &  A.  R.  v.  May,  108  111.  2S8). 

6  Ibid.  6  Smith  V.  Iron  Co.,  42  N.  J.  L.  467. 

7  Chapman  v.  Erie  Co.,  55  N.  Y.  579;  Sheehan  v.  R.  Co.,  91  N.  Y. 
332;  Johnson  v.  Xat.  Bank,  79  Wis.  414. 

«  Hankins  v.  R.  Co.,  142  N.  Y.  416  ;  Ilunn  v.  IMichigan,  &c.  R.,  78 
Mich.  513;  Felton  v.  Harbeson,  104  Fed.  Rep.  737. 

9  Eaton  V.  New  York  Cent.,  &c.  R.,  1G3  N.  Y.  391. 
10  Crispin  v.  Babbitt,  81  N.  Y.  516. 
"  Slater  v.  Jewett,  85  N.  Y.  61. 
12  Harvey  v.  R.  Co.,  88  N.  Y.  481 ;  Capper  v.  R.  Co.,  103  Ind.  305. 


344  LIABILITY   OF   MASTER 

trainmen   generally,^  are  as  to  their  ordinary  duties  fcllow- 
seivants  of  other  employees  engaged  in  operative  acts. 

§  277.     Same.  —  Summary  of  vice-principal  doctrines. 

A  master  remains  liable  to  his  servant  lor  the  negligence 
of  a  vice-principal.  To  determine  who  is  a  vice-pi'incipal 
there  are  two  tests.  But  these  are  not  in  their  entirety 
antagonistic,  and  there  may  therefore  be  a  combination  of  the 
one  with  a  part  of  the  other.  This  leads  to  these  possible 
results : 

(1)  The  rank  of  the  negligent  servant  is  the  sole  test.  If 
the  negligent  employee  is  a  superior  officer  of  the  injured 
employee,  the  master  is  liable  irrespective  of  the  character  of 
the  act.2  If  the  negligent  servant  is  not  a  superior  officer  of 
the  injured  servant,  the  master  is  not  liable  whatever  the 
character  of  the  act."^ 

(2)  The  character  of  the  act  is  the  sole  test.  If  the  superior 
officer  performs  an  operative  act  he  is  a  fellow-servant.*  If 
an  inferior  servant  performs  a  non-assignable  duty,  he  is  a 
vice-principal.^ 

(3)  The  rank  of  the  negligent  servant  is  a  sufficient  test  in 
case  the  negligent  servant  is  the  superior  of  the  injured  ser- 
vant.^ In  other  cases  the  character  of  the  act  is  the  proper 
test." 

It  is  doubtful  whether,  even  in  Ohio,  the  first  result  would 
be  accepted  in  its  logical  entirety.  In  the  greater  number  of 
jurisdictions  the  second  result  seems  to  be  accepted,  while  in 
a  few  the  combination  indicated  in  the  third  is  accepted. 

§  278.     Second  exception.  —  Incompetent  fello-wr-servants. 

If  the  master  negligently  selects  incompetent  servants  or 
negligently  retains  them,  he  is  liable  to  a  fellow-servant  injured 

1  Roberts  v.  R.  Co.,  33  Minn.  218;  Ewald  v.  R.  Co.,  70  Wis.  420. 

2  Rerea  Stone  Co.  v.  Kraft,  31  Oh.  St.  287. 

8  Rivilroad  Co.  v.  Fitzpatrick,  42  Oil.  St.  318 ;  Coal  &  Mining  Co.  v. 
Clay,  51  Oh.  St.  512,  559  (semble). 
*  Crispin  v.  Babbitt,  81  X.  Y.  516. 
6  Fuller  V.  Jewett,  80  N.  Y.  46. 
8  Chicago  &  A.  R.  v.  May,  108  111.  288. 
'  Mobile,  &c.  R.  v.  Godfrey,  155  111.  78. 


rOK   TORTS   TO   SERVANT.  345 

through  the  negligence  of  such  incompetents.^  To  furnish 
safe  servants  is  one  of  the  master's  duties,  like  the  furnishing 
of  safe  instrumentalities,  and  he  must  use  due  care  to  perform 
it.  "  Incompetency  exists,  not  alone  in  physical  or  mental 
attributes,  but  in  the  disposition  with  which  a  servant  per- 
forms his  duties.  If  he  habitually  neglects  these  duties,  he 
becomes  unreliable,  and  although  he  may  be  physically  and 
mentally  able  to  do  well  all  that  is  required  of  him,  his  dispo- 
sition toward  his  work  and  toward  the  general  safety  of  the 
work  of  his  employer  and  to  his  fellow-servants,  makes  him 
an  incompetent  man."  ^  The  master  must  be  wanting  in  due 
care,  that  is,  he  must  be  negligent  in  hiring  or  negligent  in 
retaining  the  servant  after  notice,  or  reasonable  means  of 
notice,  of  such  incompetency.^  A  single  negligent  act  of  a 
servant  is  not  sufficient  evidence  of  incompetence.*  But  evi- 
dence of  the  servant's  reputation  for  intemperance  or  other 
disability  is  competent.^     The  question  is  one  of  fact.^ 

§  279.     Third  exception.  —  Statutory  provisions. 

The  liability  of  a  master  to  one  servant  for  the  negligence 
of  another  has  been  much  enlarged  by  statute.  These  statutes 
are  sometimes  general  in  their  nature,  and  sometimes  made 
applicable  only  to  railroad  corporations. 

Employers'  Liability  Acts.  The  first  of  these  acts  is  the 
English  Employers'  Liability  Act  passed  in  1880.''  This  act 
provides  : 

(1)  When   personal   injury  is   caused   to   a  workman^  by 

1  Coppins  V.  New  York  Cent.,  &c.  R.,  122  N.  Y.  557. 

2  Ihid.,  p.  564. 

3  Cameron  v.  New  York  Cent.,  &c.  R.,  145  N.  Y.  400. 

*  Baulec  v.  N.  Y.,  &c.  R.,  .59  N.  Y.  356 ;  Evansville  R.  v.  Guyton,  115 
Ind.  450. 

5  Chicago  &  A.  R.  v.  Snllivan,  63  111.  293;  Hilts  v.  Chicago,  &c.  R.,  55 
Mich.  437. 

6  Mann  v.  Delaware  &  H.  C.  Co.,  91  N.  Y.  495;  Sutherland  v.  Troy, 
&c.  R.,  125  N.  Y.  737;  Wall  v.  Delaware,  &c.  R.,  54  Hun,  454,  affirmed, 
125  N.  Y.  727. 

'  43  &  44  Vict.  c.  42. 

8  As  defined  by  Employers  and  Workmen  Act,  1875,  i.  e.  railway  ser' 


346  LIABILITY   OF  MASTER 

reason  of  any  defect  in  the  condition  of  the  ways,  works, 
machinery,  or  plant  connected  with  or  iised  in  the  business 
of  the  employer,  which  defect  arose  from  or  had  not  been  dis- 
covered or  remedied  owing  to  the  negligence  of  the  cinjjloycr 
or  of  some  person  in  the  service  of  the  employer  and  in- 
trusted by  him  with  the  duty  of  seeing  that  the  ways,  works, 
machinery,  or  plant  were  in  proper  condition,  —  the  workman 
shall  have  the  same  right  of  compensation  and  remedies 
against  the  employer  as  if  the  workman  had  not  been  a  work- 
man of,  nor  in  the  service  of  the  employer,  nor  engaged  in  his 
work,i  unless  the  woi-kman  knew  of  the  defect  or  negligence 
which  caused  the  injury,  and  failed  within  a  reasonable  time 
to  give,  or  cause  to  be  given,  information  thereof  to  the 
employer  or  some  person  superior  to  himself  in  the  service  of 
the  employer,  unless  he  was  aware  that  the  employer  or  such 
superior  already  knew  of  the  said  defect  or  neglect.^ 

(2)  Where  personal  injury  is  caused  to  a  workman  by 
reason  of  the  negligence  of  any  person  in  the  service  of  the 
employer  who  has  any  superintendence  intrusted  to  him^ 
whilst  in  the  exercise  of  such  superintendence,  —  the  work- 
man shall  have,  etc.  [same  as  in  section  1]. 

(3)  Where  personal  injury  is  caused  to  a  workman  by 
reason  of  the  negligence  of  any  person  in  the  service  of  the 
em))loycr  to  whose  oi-dcrs  or  directions  the  workman  at  the 
time  of  the  injury  was  bound  to  conform,  and  did  conform, 
where  such  injury  resulted  from  his  having  so  conformed, — 
the  workman  shall  have,  etc.  [same  as  in  section  1]. 

vants,  manual  laborers,  etc.,  not  including  seamen  or  domestic  servants. 
Sec.  8  of  the  Act. 

1  This  somewhat  infelicitous  clause  is  interpreted  to  mean,  —  the  doc- 
trine of  the  implied  assuniptinn  by  the  workmen  of  these  risks,  including 
the  negligence  of  a  fellow-servant,  shall  not  apply.  Griffiths  v.  Earl  of 
Dudley,  0  Q.  B.  Div.  ;5fi.5. 

2  This  clau.se  retains  the  doctrine  of  contributory  negligence  and  the 
a.ssumption  of  risk  known  to  the  servant  but  unknown  to  the  master. 
The  whole  of  this  section  is  probably  law  in  most  of  the  United  States 
under  the  non-assignable  duty  test. 

8  Cleans  a  person  whose  sole  or  principal  duty  is  tliat  of  superintend- 
ence and  who  is  not  ordinarily  engaged  in  manual  labor.  Sec.  8  of  the 
Act. 


FOR   TORTS   TO   SERVANT.  347 

(4)  Where  personal  injury  is  caused  to  a  workman  by 
reason  of  the  act  or  omission  of  any  person  in  the  service  of 
the  employer  done  or  made  in  obedience  to  rules  or  by-laws 
of  the  employer,  or  in  obedience  to  particular  instructions 
given  by  any  person  delegated  with  the  authority  of  the  em- 
ployer in  that  behalf,  and  the  injury  resulted  from  some 
impropriety  or  defect  in  the  rules,  by-laws,  or  instructions, — 
the  workman  shall  have,  etc.  [same  as  in  section  1]. 

(5)  Where  personal  injury  is  caused  to  a  workman  by 
reason  of  the  negligence  of  any  person  in  the  service  of  the 
employer  who  has  the  charge  and  control  of  any  signal  points, 
locomotive  engine  or  train  upon  a  railway, —  the  workman 
shall  have,  etc.  [same  as  in  section  1].^ 

The  action  must  be  brought  within  six  months,  or  in  case 
of  death,  within  one  year  from  the  time  of  death,^  and  notice 
of  the  injury  must  be  given  within  six  weeks.  The  amount 
recoverable  shall  not  exceed  the  equivalent  of  the  estimated 
earnings  during  three  years  preceding  the  injury  of  a  person 
in  the  same  grade,  in  like  employment,  and  in  the  district  in 
which  the  workman  is  employed  at  the  time  of  the  injury .^ 

The  terms  of  this  act  with  some  local  variations  have  been 
adopted  by  statute  in  Alabama  (Code,  §§  2590-2592),  Colo- 
rado (L.  1893,  c.  77),  Indiana  (Acts  of'  1893,  c.  180),  and 
Massachusetts  (Acts  of  1887,  c.  270,  amended  by  Acts  of 
1894,  c.  499).4  Mississippi  (L.  1896,  c.  87)  adopts  substantially 
the  provisions  of  section  2. 

Railroad  Employers'  Liahility  Acts.  In  the  above  acts  a 
special  liability  is  fixed  upon  railroad  employers  by  section  5. 
Some  states  have  passed  acts  fixing  such  a  liability  without 

^  Tn  some  of  the  states  the  list  indudes  switch,  car,  or  any  part  of  the 
track  of  a  railway.  See  Alabama  Code,  §  2590-2592.  Indiana  adds 
telegraph  office,  switchyard,  shop,  round-house,  Acts  of  1893,  c.  130. 

2  In  Massachusetts  one  year  ;  in  Colorado,  two  j'ears.  In  Alabama 
and  Indiana  governed  by  general  statute  of  limitations, 

3  In  Massachusetts  .fiOOO  or  |5000  is  the  limit  according  to  prescribed 
circumstances.  The  other  statutes  leave  the  matter  in  the  same  situation 
as  to  damages  as  in  an  action  at  common  law. 

*  For  a  discussion  of  these  acts  see  Reno,  Employers'  Liability  Acts. 
For  the  Mass.  Act,  see  Appendix,  post. 


348  LIABILITY   OF   MASTER 

enlarging  the  liability  of  other  employers.  The  earliest  of  these 
acts  antedating  the  English  act  was  passed  in  Georgia  in  1855.^ 
It  j)rovidcs :  — 

'•  If  tlie  person  injured  is  himsclC  an  employee  of  the  [rail- 
road] company,  and  the  damage  was  caused  by  another  em- 
ployee, and  Avithout  fault  or  negligence  on  the  part  of  the 
person  injured,  his  employment  by  the  comi)any  shall  be  no 
bar  to  his  recovery." 

Florida  has  an  enactment  in  almost  similar  tcrms.^  Kan- 
sas has  one  in  more  general  terras,  but  to  similar  effect.^ 
So  also  Missouri^  Iowa  has  one  limited  to  injuries  oc- 
casioned by  the  use  and  operation  of  the  railroad.^  Texas 
has  one  similarly  limited.*^  Wisconsin  has  one  covering  de- 
fects in  instrumentalities  and  negligence  of  fellow-servantsJ 

Other  states  have  statutes  making  the  railroad  liable  to  an 
inferior  servant  for  any  injury  due  to  the  negligence  of  a  su- 
perior, or  of  a  person  having  control  and  direction  of  the 
injured  servant.® 

Whether  the  servant  may  by  special  contract  deprive  him- 
self of  the  benefit  of  these  statutes  is  a  disputed  question. 
At  common  law  it  has  generally  been  held  that  a  contract 
made  in  advance  whereby  an  employee  agrees  to  release  and 
discharge  his  employer  for  any  injury  that  may  be  received  by 
reason  of  the  negligence  of  the  employer,  or  of  his  servants, 
is  contrary  to  jiublic  policy  and  void.^  In  Georgia,  however, 
such  a  contract  is  held  valid. ^*^ 

1  Code,  §  2323  (303G).  2  l,  igoi,  c.  4071. 

8  L.  1874,  c.  93.  *  Rev.  St.,  §  2873. 

5  Code,  1897,  §  2071.  s  L.  1897,  Sp.  Sess.,  c.  6. 

7  L.  1893,  c.  220  ;  Statutes  1898,  §  1810. 

8  Arkansas  St.,  §  G248 ;  Mississippi  Const.,  §  193, and  Code,  §  35.59;  Mis- 
souri Rev.  St.,  §  2874 ;  Montana  Civil  Code,  §  905 ;  Ohio  L.  1890,  p.  149  ; 
Texas  Rev.  St.,  §  45G0/,-  Utah  Rev.  St.,  §  1342. 

»  Reno,  Employers'  Liability  Acts,  §  8 ;  Ry.  Co.  v.  Spangler,  44  Oh. 
St.  471 ;  Little  Rock,  &c.  Ry.  v.  Eubanks,  48  Ark.  460 ;  Johnson  i:  Rich- 
mond, &c.  Ry.,  80  Va.  975 ;  2  Tlioiiipson  on  Neg.,  1025 ;  Roe.sner  v. 
Hermann,  8  Fed.  Rep.  782;  Louisville,  &c.  R.  Co.  v.  Orr,  91  Ala.  548. 

10  Western,  &c.  Ry.  v.  Bishop,  50  Ga.  405;  Fulton  ISIills  v.  Wilson,  89 
Ga.  318.  In  New  York  the  precise  question  has  not  risen  for  decision, 
and  the  Court  of  Appeals  has  carefully  refrained  from  expressing  its 


FOR   TORTS   TO   SERVANT.  349 

By  statute,  under  the  Employers'  Liability  Acts,  the  question 
presents  itself  under  two  aspects.  First,  in  some  jurisdictions 
the  statute  does  not  in  express  terms  forbid  the  making  of 
such  contracts.  This  is  the  case  under  the  English  and  Ala- 
bama statutes,  but  diametrically  opposite  results  have  been 
reached  by  the  courts  in  those  jurisdictions.  In  England  it 
has  been  held  that  it  is  not  contrary  to  the  policy  of  the  stat- 
ute to  allow  an  employee  to  waive  the  benefit  of  the  act  by 
contract,  and  that  such  a  contract  is  binding  not  only  upon  the 
employee  himself,  but  also  upon  his  representatives.^  In  Al- 
abama, it  has  been  held  that  such  a  contract  is  void  as  con- 
trary to  public  policy.2  Second,  in  some  states  the  statute 
expressly  forbids  the  making  of  such  contracts.  This  is  the 
case  under  the  statutes  in  Indiana,^  lowa,^  Massachusetts,^ 
Minnesota,^  Mississippi,"  Texas,^  Wisconsin,^  and  Wyoming.^^ 

That  part  of  the  Ohio  statute  making  this  restriction^^  has 
been  held  unconstitutional.^^ 

opinion  on  the  question  in  cases  where  it  might  have  done  so.     Purdy  v. 
Rome,  &c.  Railroad  Company,  125  N.  Y.  209. 

^  Griffiths  V.  Dudley,  9  Q.  B.  D.  357.  Reno,  Employers'  Liability 
Acts,  §  6. 

2  Hissong  V.  Richmond,  &c.  Ry.,  91  Ala.  514. 

3  Laws  of  1893,  ch.  130,  §  5. 
*  Code,  §  1307. 

5  St.  1894,  ch.  508,  §  6. 

6  Laws  of  1887,  ch.  13. 

'  Constitution  (1890),  §  193. 

8  Laws  of  1891,  ch.  24,  §2. 

9  Laws  of  1893,  ch.  220. 

10  Laws  of  1890-91,  ch.  28. 

"  St.  of  Apr.  2,  1890  (Ohio  Laws,  vol.  87,  p.  149). 

12  Shaver  v.  Penn.  Co.,  71  Fed.  931. 


350  LIABILITY   OF   MASTER 


CHAPTER   XXV. 

LL\BIL1TY   OF   MASTER   TO   SERVANTS   FOR   HIS   OWN   TORTS. 

§  280.     Introductory. 

The  liability  of  a  master  to  his  servants  for  torts  may  be  due 
to  his  own  personal  act  or  omission,  or  to  the  act  or  omission 
of  his  representative.  We  have  discussed  the  latter  situation 
and  have  seen  within  what  limits  the  master  is  liable  to  one 
servant  for  the  torts  of  another.  It  now  remains  to  discuss 
the  liability  of  the  master  for  his  own  personal  torts  resulting 
in  damages  to  his  servant.  These  torts  uuiy  be  either  negli- 
gent or  wilful.  If  negligent,  they  may  be  either  operative 
acts  or  omissions,  or  acts  or  omissions  connected  with  the  per- 
formance of  one  of  the  non-assignable  duties  heretofore 
enumerated. 

§  281.     Negligent  operative  act. 

If  the  master  is  working  with  his  servants  in  operating  the 
machinery  of  the  service,  he  is  liable  for  any  injury  to  them 
arising  from  his  negligence.  He  is  not  a  fellow-servant  when 
so  engaged.  Any  representative  of  his,  however  high  in  rank, 
may  become  a  fellow-servant  if  engaged  in  an  operative  act,^ 
but  not  so  the  master  himself.  It  is  no  part  of  the  implied 
contract  of  a  servant  to  assume  any  risk  as  to  the  master's 
negligence  under  any  circumstances.  It  follows  that  a 
servant  may  recover  for  any  injury  due  to  the  master's 
personal  negligence.^  If  the  master  is  a  partnership,  the 
negligence  of  one  partner  is  the  negligence  of  all.^  If  the 
master's   negligence  united  with    the   negligence   of    a  fel- 

1  Crispin  v.  Babbitt,  81  N.  Y.  516. 

*  Lorentz  v.  Kobinson,  61  Md.  64. 

8  Ashwortli  r.  Stanwix,  3  El.  &  El.  701. 


TO   SERVANTS   FOR   HIS   OWN   TORTS.  351 

low-servant  causes  the  injury,  the  master  is  liable,  provided 
his  negligence  is  a  proximate  concurring  cause.^ 

§  282.     Negligent  performance  of  non-assignable  duties. 

The  non-assignable  duties  of  the  master  have  already  been 
enumerated.^  The  master  is  bound  to  use  due  care  in  the 
performance  of  these  duties  and  is  liable  to  a  servant  injured 
in  consequence  of  his  failure  to  do  so.  If  he  negligently  fails 
to  furnish  a  safe  place  to  work  or  safe  instrumentalities,  or  a 
sufficient  number  of  competent  servants,  or  suitable  rules  and 
regulations,  or  proper  warning  of  extraordinary  risks,  or  proper 
inspection,  he  is  liable  to  any  servant  injured  in  consequence 
of  such  negligent  failure.^  These  are  personal  duties,  and, 
whoever  may  be  delegated  to  perform  them,  the  law  always 
treats  the  case  as  if  the  master  were  personally  performing 
them.  The  degree  of  care  required  of  the  master  in  the  dis- 
charge of  these  duties  is  said  to  be  ordinary  care,  that  is  the 
care  which  reasonably  prudent  men  would  use  under  like  cir- 
cumstances.* This  is  so  in  the  case  of  railroad  companies,^ 
although  as  to  passengers  they  are  bound  to  use  the  utmost 
care  that  human  vigilance  makes  possible.^  Accordingly  the 
master  is  not  bound  to  provide  the  very  best  or  most  approved 
appliances,  but  only  those  which  are  reasonably  fit  and  safe,'^ 
Conformity  to  the  usage  of  other  similar  employers  does  not 
of  itself  conclusively  show  due  care.^  Having  supplied  them 
he  is  not  liable  if  a  fellow-servant  negligently  fails  to  use  them 
or  to  use  them  properly.^    So  if  it  is  a  part  of  the  servant's  own 

1  Cone  V.  Delaware,  &c.  R.,  81  N.  Y.  206 ;  Ellis  v.  New  York,  &c.  R., 
95  N.  Y.  546 ;  Franklin  v.  R.  Co.,  37  Minn.  409. 

2  Ante,  §  276. 

^  Cases  cited  in  §  276,  ante. 

*  Washington,  &c.  R.  v.  McDade,  135  U.  S.  554  ;  Painton  v.  Northern 
Cent.  R.  ;  83  N.  Y.  7 ;  Probst  v.  Delamater,  100  N.  Y.  206. 

5  Chicago,  &c.  R.  v.  Kerr,  148  III.  605. 

6  Carroll  v.  Staten  Is.  R.,  58  N.  Y.  126 ;  Palmer  v.  Delaware  &  H.  C. 
Co.,  120  N.  Y.  170. 

'  Harley  ;;.  Buffalo,  &c.  Co.,  142  N.  Y.  31 ;  Conway  v.  111.  Cent.  R., 
50  Iowa,  465. 

8  Wabash  Ry.  v.  McDaniels,  107  U.  S.  454. 

»  Harley  v.  Buffalo  Car  Mfg.  Co.,  142  N.  Y-  31. 


3.j2  liability  of  master 

duty  to  construct  for  himself  a  scaffold  or  other  apj)liance,  and 
suitable  material  is  furnished  for  this  purpose,  the  master  is 
not  liable  if  it  is  improperly  constructed/  whereas  he  would 
be  liable  if  he  supplied  the  scaffold  to  the  servant  ready  con- 
structed for  the  latter's  use.*^  In  the  employment  of  fellow- 
servants,  the  master  is  bound  to  use  reasonable  care  and 
diligence  to  select  those  who  are  competent  and  reliable  and 
not  to  continue  in  the  em[)loymcnt  those  who  are  unfit  or 
unreliable.^  If  due  diligence  has  been  used  in  selecting  a 
servant,  subsequent  facts  disclosing  unfitness  must  be  brought 
actually  or  constructively  to  the  master's  notice  before  he  will 
be  deemed  negligent  in  continuing  the  servant  in  the  employ- 
ment."* The  master  must  also  use  due  care  to  have  a  suffi- 
cient number  of  competent  servants.^  The  same  rule  of 
due  care  applies  in  the  promulgating  and  enforcing  suitable 
rules  for  the  government  of  the  service,^  giving  warning  of 
unusual  or  extraordinary  risks,^  though  in  the  latter  case 
it  seems  actual  notice,  and  not  due  care  to  give  notice,  is 
the  requirement.^  So  also  due  care  is  the  test  as  to  inspec- 
tion and  oversight  of  a])plianccs  and  servants.^ 

§  283.     Assumption  of  risk. 

The  doctrine  that  the  master  is  liable  to  the  servant  for 
the  negligent  failure  to  perform  any  one  of  the  personal  or 

1  Hogan  V.  Smith,  125  N.  Y.  774;  Marsh  v.  Herman,  47  Minn.  537. 

s  Manning  v.  llogan,  78  N.  Y.  C15.  Cf.  Benzing  v.  Steinway,  101  N.  Y. 
547. 

3  Laning  v.  N.  Y.  Cent.,  &c.  R.,  49  N.  Y.  521 ;  Chapman  v.  Erie  R., 
55  N.  Y.  570 ;  Cameron  v.  N.  Y.  Cent.,  &c.  R.,  145  N.  Y.  4U0  ;  AVabash 
Ry.  V.  McDaniels,  107  U.  S.  454. 

*  Whittaker  r.  Delaware,  &c.  R.,  126  N.  Y.  544;  Cameron  v.  N.  Y. 
Cent.,  &c.  R.,  145  N.  Y.  400  ;  Park  v.  N.  Y.  Cent.,  &c.  R.,  155  N.  Y.  215. 
Some  states  permit  evidence  of  general  reputation  for  incompetency. 

6  Flike  V.  Boston,  &c.  R.,  53  N.  Y.  549 ;  Pennsylvania  Co.  v.  McCaf- 
frey, 130  Ind.  430. 

6  Slater  v.  Jewett,  85  N.  Y.  Gl;  Abel  v.  Delaware,  &c.  Co.,  103  N.  Y. 
581,  12S  N.  Y.  GC2. 

7  Mather  v.  Rillston,  156  U.  S.  391;  Fox  v.  Peninsular  Lead  Works, 
84  Midi.  076. 

8  Wheeler  v.  Wason  Mfg.  Co.,  135  Mass.  294. 
»  Byrne  v.  Eastmans  Co.,  163  N.  Y.  461. 


TO   SERVANTS   FOR   HIS   OWN   TORTS.  353 

non-assignable  duties,  is  subject  to  the  qualification  that  the 
servant  may  voluntarily  assume  the  risk  arising  from  such 
failure.!  By  the  contract  of  employment  the  master  ordi- 
narily assumes  the  risk  as  to  the  performance  of  these  duties 
and  the  servant  assumes  all  the  other  risks  of  the  service.^ 
But  if,  at  the  time  the  contract  is  made  and  the  servant 
enters  the  employment,  he  knows  and  fully  comprehends 
that  the  conditions  then  existing  increase  his  risks  ^beyond 
those  which,  in  the  absence  of  such  knowledge,  he  would 
otherwise  expect  to  encounter,  he  is  said  to  voluntarily  as- 
sume the  added  risks  and  the  master  is  relieved  to  that 
extent  of  the  risks  which  he  would  otherwise  be  deemed  to 
undertake.*  The  implied  terms  as  to  the  risks  are  modified 
by  the  actual  facts  known  and  appreciated  by  the  servant  at 
the  time  of  making  the  contract,  or,  to  state  another  reason 
for  the  same  result,  the  servant  cannot  recover  damages  for 
injuries  arising  from  a  danger  which  he  voluntai'ily  and  with 
full  appreciation  of  the  risk  encounters.  If,  therefore,  the 
servant,  with  full  knowledge  and  appreciation  of  tlie  added 
danger,  engages  to  work  in  an  unsafe  place  (that  is  not  as 
safe  as  due  care  on  the  part  of  the  master  would  make  it) 
he  assumes  the  risk  of  the  situation  as  it  is  and  cannot  re- 
cover from  the  master  for  an  injury  resulting  from  it.^ 

But  what  of  risks  arising  subsequent  to  the  contract,  or 
not  known  to  the  servant  until  after  he  has  entered  upon 
the  employment  ?  In  such  a  case  it  cannot  be  said  that  he 
impliedly  contracted  to  assume  them,  unless,  indeed,  it  be 
argued  that  he  impliedly  contracted  to  assume  any  risks  of 
which   he   subsequently   receives   notice,    a   contention    that 

1  See  Bigelow  on  Torts  (7th  ed.),  §§  753-764. 

2  Consolidated  Coal  Co.  v.  Haenni,  146  111.  614. 

3  Mere  knowledge  of  defects  is  not  enough  :  there  must  also  be  an  ap- 
preciation of  the  added  risk.     Cook  v.  R.  Co.,  31  Minn.  45. 

*  Coombs  i\  New  Bedford  Cordage  Co.,  102  Mass.  572 ;  Mahoney  v. 
Dore,  155  Mass.  51-3 ;  Powers  v.  New  York  R.,  98  N.  Y.  274;  Crown  v. 
Orr,  140  N.  Y.  450;  Ragon  v.  Toledo  R.,  97  Mich.  265. 

5  Sweeney  v.  Berlin,  &c.  Co.,  101  N.  Y.  520;  Knisley  v.  Pratt,  148  N.  Y. 
372;  O'Maley  v.  South  Boston  Gaslight  Co.,  158  Mass.  135;  Saxton  v. 
Hawkaworth,  20  L.  T.  n.  s.  851,     Cases  supra. 

23 


354  LIABILITY   OF   MASTER 

would  push  the  doctrine  of  the  implied  terms  to  its  extreme 
limits.  In  such  cases  the  courts  fall  back  upon  the  maxim 
volenti  non  fit  injuria,  and  hold  that  if  the  servant  remains 
in  the  employment  after  a  full  knowledge  and  appreciation 
of  the  risk  arising  from  the  failure  of  the  master  to  perform 
any  one  of  the  personal  or  non-assignable  duties,  and  for 
such  a  length  of  time  and  under  such  circumstances  as  to 
be  satisfactory  evidence  of  his  intent  to  assume  the  risk 
rather  than  abandon  the  service,  the  risk  is  shifted  from  the 
master  to  the  servant  and  the  latter  cannot  recover  for  an 
injury  arising  from  it.^  Whether  the  evidence  is  sufficient 
to  establish  a  voluntary  assumption  of  the  risk  is  a  question 
of  fact.^  Mere  knowledge  of  the  risk  is  not  enough:  the 
maxim  is  not  ^'- scienti  non  fit  injuria'''  but  ^'•volenti  non  fit 
injuria''^  Remaining  in  the  employment  after  knowledge 
of  the  risk  is  not  conclusive,*  although,  as  in  other  similar 
cases,  the  court  may  think  it  conclusive  under  the  facts  and 
circumstances  of  a  particular  casc.^ 

Whether  there  is  any  distinction  between  cases  where  the 
risk  is  primarily  thrown  on  the  employer  by  the  common  law 
and  cases  where  it  is  imposed  upon  him  by  statute,  the  courts 
are  not  agreed.  It  is  generally  held  that  there  may  be  an 
assumption  by  the  servant  of  the  general  statutory  risks 
enumerated  in  the  Employers'  Liability  Acts.^  But  a  dis- 
tinction is  taken  between  such  cases  and  the  case  where  the 
statute  prescribes  a  specific  duty,  as  the  blocking  of  guard- 
rails and  switches  or  the  fencing  of  machinery,  and  the 
master  fails  to  comply  with  the  statute.     In  such  a  case  some 


1  Ciriack  v.  Merchants'  Woolen  Co.,  151  Mass.  152. 

2  Smith  V.  Baker,  1891,  A.  C.  325;  Mahoney  v.  Dore,  155  Mass.  513; 
Great  N.  Ry.  v.  Kasischke,  104  Fed.  Rep.  440. 

8  Smith  ('.  Baker,  supra,  pp.  337,  355.  But  see  Powers  v.  New  York, 
&c.  R.,  98  N.  Y.  274. 

*  Ibid. ;  Northern  Pac.  R.  v.  Mares,  123  U.  S.  710 ;  Hawley  v.  North- 
ern Central  R.,  82  N.  Y.  370. 

6  M'Peck  V.  Central  Vt.  R.,  79  Fed.  Rep.  590;  Powers  i'.  New  York, 
&c.  R.,  98  N.  Y.  274. 

«  O'Maley  v.  South  Boston  Gaslight  Co.,  158  Mass.  135. 


TO   SERVANTS   FOR   HIS   OWN   TORTS.  355 

courts  hold  that  the  risk  cannot  be  shifted  to  the  servant,^ 
while  other  courts  hold  that  it  may.^  Assumption  of  risk 
is  to  be  clearly  distinguished  from  contributory  negligence 
which  is  a  bar  whether  the  master's  duties  arise  at  common 
law  or  by  statute.^ 

While  the  doctrine  of  the  assumption  of  the  risk  is  thus 
firmly  established,  it  is  subject  to  certain  important  qualifi- 
cations which  may  now  be  briefly  enumerated. 

(1)  The  servant  must  know  and  clearly  appreciate  the 
risk  arising  from  the  master's  failure  to  perform  one  of  the 
prescribed  duties.  In  other  words  the  assumption  of  the 
risk  must  be  really  voluntary.  This  is  a  question  of  fact 
and  should  ordinarily  be  left  to  the  jury.^  The  facts  may, 
however,  be  so  obvious  that  the  court  will  determine  as  an 
indisputable  inference  that  the  servant  did  assume  the  risks.^ 
Risks  existing  at  the  time  the  servant  enters  the  employment, 
and  of  which  he  has  actual  or  constructive  notice,  are  gener- 
ally held  to  be  voluntarily  assumed.^  Risks  arising  after  he 
enters  the  service  are  not  shifted  to  the  servant  until  he  has 
consciously  and  volimtarily  encountered  them  for  such  a 
time  as  to  be  satisfactory  evidence  of  assumption." 

(2)  The  servant  must  not  be  acting  under  coercion,  as  a 
convict^  or  a  seaman,^  or  a  terrorized  foreigner,^'' or,  possibly, 
a  minor.ii     But  a  fear  of  discharge,  or  a  threat  of  discharge, 

1  Narramore  v.  Cleveland,  &c.  Ry.,  96  Fed.  Rep.  298. 

2  Knisley  v.  Pratt,  148  N.  Y.  372,  149  N.  Y.  582. 

^  Narramore  v.  Cleveland,  &c.  Ry.,  96  Fed.  Rep.  298 ;  Freeman  v.  Glens 
Falls  Paper  Mill  Co.,  70  Hun,  530,  affirmed  142  N.  Y.  639. 

4  Smith  V.  Baker,  1891,  A.  C.  325. 

5  O'Maley  v.  South  Boston  Gaslight  Co. ,158  Mass.  135.  See  the  differ- 
ence of  judicial  opinion  in  Davis  r.  Forbes,  171  Mass.  548. 

8  Coombs  V.  New  Bedford  Cordage  Co.,  102  Mass.  572;  Mahoney  v. 
Dore,  155  Mass.  513 ;  Crown  v.  On;  140  N.  Y.  450.  But  see  Wallace  v. 
Central  Vermont  R.,  138  N.  Y.  302. 

T  Smith  r.  Baker,  1891,  A.  C  325;  Libby  v.  Scherman,  146  111.  540. 

8  Chattahoochee  Brick  Co.  v.  Braswell,  92  Ga.  631. 

9  Eldridge  v.  Atlas  Steamship  Co.,  134  N.  Y.  187. 

10  Wells  &  F.  Co.  V.  Gortorski,  50  111.  App.  445. 

11  Brazil  Coal  Co.  v.  Gaffney,  119  Ind.  455  ;  Kehler  y.  Schwenk,  151  Pa. 
St.  505.     Infancy  in  and  of  itself  does  not  prevent  the  assumption  of  risfe 


356  LIABILITY   OF   MASTER 

is  not  coercion,^  thoudi  it  seems  to  be  considered  by  some 
courts  evidence  that  the  servant  was  not  acting  voluntarily.^ 

(3)  The  servant  must  not  be  acting  under  necessity,  as 
where  a  new  risk  arises  subsequent  to  the  employment  which 
he  must  for  the  once  reluctantly  encounter.'^ 

(4)  If  the  master  promises  to  remedy  the  defect  the  ser- 
vant does  not  assume  the  risk  during  such  time  as  may  rea- 
sonably be  allowed  for  the  performance  of  the  promise,*  or 
until  all  reasonable  expectation  that  the  promise  will  be  per- 
formed is  at  an  cnd,^  unless  the  danger  is  so  imminent  that 
no  prudent  person  would  encounter  it.^ 

(o)  The  servant  may  reasonably  rely  upon  the  master's 
superior  judgment  in  case  the  latter  assures  him  there  is  no 
danger,  unless  the  danger  is  so  obvious  that  the  assurance 
ought  not  to  influence  the  conduct  of  a  reasonably  prudent 
man  in  like  circumstances^ 

§  284.     Contributory  negligence. 

The  doctrine  that  the  master  is  liable  to  the  servant  for 
the  negligent  failure  to  perform  any  one  of  the  personal  or 
non-assignable  duties,  is  subject  to  the  further  qualification 
that  the  servant  cannot  recover  for  injuries  due  in  any  proxi- 
mate degree  to  his  own  contributory   negligence.^     This  is 

De  Graff  v.  New  York  Cent.,  &c.  R.,  76  N.  Y.  125;  Michael  v.  Stanley,  75 
Md.  464. 

1  Sweeney  v.  Berlin,  &c.  Co.,  101  N".  Y.  520;  Dougherty  v.  West  Supe- 
rior Iron  Co.,  88  Wis.  343. 

2  ]\Ia.son  V.  Richmond,  &c.  R.,  Ill  N.  C  482;  Richmond,  &c.  R.  v.  Nor- 
ment,  84  Va.  167. 

'  Fitzgerald  v.  Connecticut  Paper  Co.,  155  Mass.  155. 

*  Illinois  Steel  Co.  v.  Mann,  170  111.  200. 

^  Ibid.,  dissenting  opinion. 

8  Hough  V.  Texas,  &c.  R.,  100  U.  S.  213 ;  Northern  Pac.  R.  v.  Bab- 
cock,  154  U.  S.  10(1;  Smith  v.  Backus,  64  'SUnn.  447;  Laning  v.  N.  Y.  Cent., 
&c.  R.,  49  N.  Y.  521;  Indianapolis,  cScc.  R.  c.  Watson,  114  Ind.  20. 

■'  Chicago  Brick  Co.  v.  Sol)kowiak,  148  111.  573  ;  ^^'agner  v.  Jayne  Chem- 
ical Co.,  147  Pa.  St.  475;  Haas  v.  Balch,  50  Fed.  Rep.  984.  Cf.  Davis  v. 
Forbes,  171  Mass.  548. 

s  Elliott  V.  Chicago,  &c.  Ry.,  150  U.  S.  245;  Pennsylvania  R.  v.  Zink, 
126  Pa.  St.  288. 


TO   SERVANTS   FOR   HIS   OWN   TORTS.  357 

merely  a  part  of  the  general  doctrine  of  contributory  negli- 
gence. The  distinction  between  assumption  of  risk  and  con- 
tributory negligence  must  be  kept  in  mind.^  Both  issues 
may  be  raised  in  the  same  case.  For  instance,  plaintiff  al- 
leges that  the  platform  on  which  he  worked  was  unsafe  and 
that  it  was  unlighted.  If  it  was  unsafe  the  question  is,  did 
he  assume  the  risk  ?  If  it  was  unlighted  but  suitable  torches 
were  furnished  which  plaintiff  failed  to  use,  the  question  is, 
was  plaintiff  guilty  of  contributory  negligence  "i^ 

§  285.     Wilful  torts. 

A  master  is  liable  to  a  servant  for  wilful  torts  committed 
against  him  as  he  is  to  any  other  person.  In  certain  cases, 
however,  the  law  allows  a  defence  of  justification  or  excuse 
or  privilege  based  upon  the  relationship,  as,  for  instance,  the 
defence  of  discipline  in  an  action  for  assault  upon  a  seaman,^ 
or  of  privileged  communication  in  an  action  for  slander  in 
giving  the  servant  a  bad  character. 

If  a  master  is  asked  the  character  of  a  servant  who  is  or 
has  been  in  his  employ  his  communication  to  another  actual 
or  prospective  master  is  conditionally  privileged.^  If  he  vol- 
unteers the  information  he  may  be  privileged  under  certain 
circumstances,  but  stronger  evidence  of  bona  fides  will  be 
required.^  If  he  has  given  a  favorable  character  and  after- 
wards discovers  facts  which  lead  him  to  doubt  the  character 
of  the  servant,  he  is  privileged  to  volunteer  the  new  facts  to 
the  employer.*'  If  he  dismisses  a  servant,  he  may  inform  his 
other  servants  of  the  reason.^  His  conditional  privilege  is 
overcome,  however,  by  proof  of  express  malice.  That  what 
he  said  was  false  is  not  proof  of  malice  ;  but  that  he  knew 

1  Narramore  v.  Cleveland,  &c.  R.,  96  Fed.  Rep.  298. 

2  Kaaie  v.  Troy  Steel  Co.,  139  N.  Y.  369. 

8  Michaelson  v.  Denison,  3  Day  (Conn.),  294;  Brown  v.  Howard,  14 
Johns.  (N.  Y.)  119. 

<  Pattison  v.  Jones,  8  B.  &  C.  578. 

6  Ibid. 

6  Fowles  V.  Bowen,  30  N.  Y.  20. 

'  Somerville  v.  Hawkins,  10  C.  B.  583;  Hunt  v.  Great  N.  Ry ,  1891, 
2  Q.  B.  189. 


353      LIABILITY   OF   MASTER   TO   SERVANTS   FOR   HIS   OWN   TORTS. 

it  to  be  false  is  the  best  evidence,  and  that  he  knew  it  to  be 
false  may  be  inferred  from  the  fact  that  he  is  giving  a  bad 
character  in  order  to  compel  the  servant  to  remain  in  his 
own  service.^ 

A.t  common  law  a  master  is  under  no  obligation  to  give  his 
servant  a  letter  of  recommendation  or  any  statement  as  to 
his  character  upon  the  termination  of  the  relationship.^  This 
question  has  been  revived  in  modern  cases  in  consequence 
of  a  system  of  "  clearance  cards  "  adopted  by  raili-oads  where- 
by an  employee  leaving  the  service  is  given  a  statement  as 
to  the  cause  of  his  departure  from  it.  But  it  is  held  that  in 
the  absence  of  a  contract  to  give  such  a  card,  or  of  an  es- 
tablished usage  in  view  of  which  contracts  of  service  are 
made,  there  is  no  obligation  resting  upon  the  master  to  give 
the  card.^  But  it  has  been  held  that  when  a  class  of  em- 
ployers mutually  agree  not  to  employ  a  servant  formerly  in 
the  service  of  another  without  the  presentation  of  a  clearance 
card,  that  it  becomes  the  duty  of  any  party  to  such  agi'eement 
to  give  a  clearance  card  to  a  servant  entitled  to  it,  and  that 
withholding  it  is  equivalent  to  a  statement  that  the  servant 
is  within  a  proscribed  class."* 

Blacklisting  employees,  that  is  circulating  a  list  of  dis- 
charged employees  among  a  class  of  employers  who  have  an 
understanding  that  they  will  not  employ  persons  so  listed,  is 
an  actionable  wrong  for  which  the  blacklisted  employee  may 
have  an  action  at  law,^  but  not,  it  seems,  an  injunction.^ 
Many  states  make  such  blacklisting  a  crime." 

1  Jackson  v.  Hopperton,  16  C.  B.  N.  s.  829. 

2  Carrol  v.  Bird,  3  Esp.  201;  Cleveland,  &c.  R.  r.  Jenkins,  17i  111.  398. 

*  Cleveland,  &c.  R.  v.  Jenkins,  supra. 

*  New  York,  &c.  Ry.  v.  SchafEer,  17  Ohio  Circ.  Ct.  Rep.  77. 

6  Blumenthal  v.  Shaw,  77  Fed.  Rep.  954  ;  Hundley  v.  Louisville,  &c. 
R.  (Ky.).  48  S.  W.  429;  Mattison  v.  L.  S.  &  M.  S.  Ry..  3  Oil.  Dec.  526. 

8  Worthiniiton  v.  Waring,  157  INIass.  421. 

T  Colorado  L.  1897,  c.  31 ;  Conn.  L.  1897,  c.  184  ;  Towa  Code,  §  5027 ; 
Minn.  L.  1892,  c.  174;  Mo.  L.  1891,  p.  122;  N.  Dak.  Const.,  §  212, 
Code,  §  7U42  ;  Wis.  Stat.,  §  4466  6. 


PART    IV. 

LIABILITY   OF  SERVANT  FOR  TORTS. 

§  286.     Introductory. 

A  servant's  torts  may  be  either  those  of  non-feasance  or 
those  of  misfeasance.  The  injured  party  may  be  either  the 
master,  a  fellow-servant,  or  a  stranger.  We  have  now  to 
consider  each  of  these  cases. 


360  LIABILITY   OF   SERVANT 


CHAPTER  XXVI. 

servants'  liability  for  torts. 

1.   Liability  to  master. 

§  287.     Gratuitous  service. 

We  have  already  seen  that  if  one  without  consideration 
promises  to  do  a  service  for  another,  that  not  doing  the 
service  at  all  is  no  actionable  wrong,  however  seriously  the 
promisee  may  be  damaged  thereby.^  This  is  a  mere  non- 
feasance, and  as  there  is  no  consideration  for  the  promise  no 
action  can  be  maintained. 

But  if  the  gratuitous  agent  enter  upon  the  performance  of 
the  duty  and  is  negligent  or  unskilful  where  he  may  reason- 
ably be  held  to  have  undertaken  for  care  and  skill,  the  em- 
ployer may  recover  damages  for  the  injury  occasioned  thereby .^ 
If  one  intrust  a  horse  to  another  as  gratuitous  servant  or 
bailee  to  be  shown  to  a  third  })erson,  and  the  gratuitous 
servant,  being  conversant  with  and  skilled  in  horses,  negli- 
gently rides  the  horse  upon  slippery  grounds  so  that  it  falls 
and  is  injured,  the  gratuitous  servant  or  bailee  is  liable.^ 

The  distinction  here  taken  between  non-feasance  and  mis- 
feasance in  the  case  of  a  gratuitous  agent  or  servant  sued 
by  the  employer,  is  taken  as  to  a  paid  servant  sued  by  a 
third  person  who  is  injured  in  consequence  of  the  servant's 
negligence. 

§  288.     Paid  service. 

If  the  servant  agrees  upon  a  consideration  to  perform  a 
service  and  neglects  to  do  so  to  the  damage  of  the  master, 

^  Ante,  §§  29,  97  ;  Wilkinson  v.  Coverdale,  1  Esp.  75;  Thorne  v.  Deas, 
4  Johns.  (N.  Y.)  84. 

2  Ante,  §§  97-98;  Whiteheafl  v.  Greetham,  2  Biiig.  4G4. 
«  Wilson  V.  Brett,  11  M.  &  W.  113. 


FOR   TOUTS   TO   CO-SERVANT.  361 

the  latter  may  maintain  an  action  for  the  loss.^  In  such  a 
case  it  is  immaterial  whether  the  negligence  is  merely  a  non- 
feasance or  a  misfeasance,  since  the  consideration  supports 
the  promise  to  act,  and  to  act  with  care  and  skill. 

For  any  negligence  in  the  discharge  of  his  duties  resulting 
in  damage  to  the  master,  the  servant  is  liable,^  but  not  for 
accidental  loss  or  injury  not  due  to  negligence.^  If,  in  con- 
sequence of  the  servant's  wrongful  act,  the  master,  being 
himself  not  personally  at  fault,  is  obliged  to  pay  damages  to 
a  third  person,  he  may  recoup  the  same  from  the  servant  by 
way  of  indemnity.* 

2.   Liability  to  fellow-servant. 
§  289.     Servant  liable  to  co-servant  for  misfeasance. 

There  can  be  no  doubt  of  one  servant's  liability  to  another 
for  any  wilful  tort.^ 

Notwithstanding  the  authority  of  some  early  cases,^  it  is 
established  law  that  one  servant  is  also  liable  to  a  fellow- 
servant  for  negligence  in  the  performance  of  the  duties  of  the 
service.'^  But  some  courts  make  a  subtle  distinction  between 
misfeasance  and  non-feasance,  and  hold  the  negligent  servant 

1  Ante,  §§  88-89. 

2  Countess  of  Salop  v.  Crompton,  Cro.  Eiiz.  777 ;  Lewson  v.  Kirk, 
Cro.  Jac.  265;  Mobile,  &c.  R.  v.  Clanton,  59  Ala.  392;  Gilson  v.  Collins, 
66  111.  136. 

3  Savage  v.  Walthew,  11  Mod.  135;  Walker  v.  Guarantee  Ass'n,  18 
Q.  B.  277  ;  Rechtscherd  v.  Accommodation  Bank,  47  Mo.  181 ;  Page  v. 
Wells,  37  Mich.  415  ;  Johnson  v.  Martin,  11  La.  An.  27. 

*  Green  v.  New  River  Co.,  4  T.  R.  589  ;  Pritchard  v.  Hitchcock, 
6  M.  &  G.  151;  Grand  Trunk  Ry.  v.  Latham,  63  Me.  177;  Challiss  i-. 
Wylie,  35  Kans.  506  ;  Oceanic,  &c.  Nav.  Co.  v.  Compania,  &c.  Espanola, 
134  N.  Y.  461,  467. 

6  Reg.  V.  Huntley,  3  Car.  &  K.  142. 

6  Southcote  V.  Stanley,  1  Hurl.  &  N.  247  (dictum) ;  Albro  v.  Jaquith, 
4  Gray  (Mass.),  99. 

''  Osborne  v.  Morgan,  130  Mass.  102;  Griffiths  v.  Wolfram,  22  Minn. 
185;  Greenberg  v.  Whitcomb  Lumber  Co.,  90  Wis.  225;  Lawton  v. 
Waite,  103  Wis.  244;  Daves  v.  Southern  Pac.  Co.,  98  Cal.  19;  Martin  v. 
Louisville,  &c.  R.,  95  Ky.  612  ;  Warax  v.  Cincinnati,  &c.  R.,  72  Fed. 
Rep.  037. 


362  LIABILITY   OF   SERVANT 

liable  to  the  injured  servant  for  the  former  but  not  for  the 
latter.^  While  the  distinction  is  a  valid  one  between  bare 
non-feasance  (not  doing  at  all)  and  misfeasance  (doing  ill 
either  by  commission  or  omission  after  performance  begun), 
the  distinction  between  commission  and  omission  after  per- 
formance is  once  begun  has  led  to  considerable  confusion. 
This  subject  will  be  discussed  in  the  succeeding  sections. 

3.   Liability  to  third  persons. 

§  290.     Liable  for  misfeasance,  but  not  for  non-feasance. 

In  dealing  with  the  liability  of  the  servant  for  his  torts  we 
are  met  at  the  outset  with  the  distinction  between  non- 
feasance and  misfeasance.  The  statement  is  that  a  servant 
is  liable  to  third  persons  (including  fellow-servants)  for  his 
misfeasance  resulting  in  injury,  but  not  for  his  non-feasance; 
that  as  to  the  first  he  cannot  shield  himself  behind  the  plea 
that  he  was  acting  in  behalf  of,  or  under  the  command  of,  a 
master,  since  every  man  is  liable  for  his  own  positive  wrongs,^ 
but  that  as  to  the  second,  he  is  liable  only  to  the  master, 
since  no  one  but  the  master  can  complain  that  a  servant  has 
not  done  what  he  undertook  to  do.^  It  becomes  necessary, 
therefore,  to  examine  these  two  concepts  of  the  law  as  bearing 
upon  the  liability  of  an  agent  for  his  torts. 

§  291.     Meaning  of  non-feasance. 

"  Non-feasance  is  the  omission  of  an  act  which  a  person 
ought  to  do  ;  misfeasance  is  the  improper  doing  of  an  act 
which  a  person  might  lawfully  do;  and  malfeasance  is  the 
doing  of  an  act  which  a  person  ought  not  to  do  at  all."* 

1  Burns  v.  Pethcal,  75  IIuii  (X.  Y.),437;  Murray  v.  Usher,  117  N.  Y. 
542. 

2  Perkins  v.  Smith,  1  Wils.  328;  Weber  v.  Weber,  47  Mich.  569; 
Phelps  r.  Wait,  30  N.  Y.  78  ;  Johnson  v.  Barber,  10  111.  425 ;  Mitchell  v. 
Harmony,  13  How.  (U.  S.)  115  ;  Estes  v.  Worthington,  30  Fed.  Rep.  465. 

8  Lane  v.  Cotton,  12  Mod.  472,  488;  Whitfield  v.  Lord  Le  Despencer, 
2  Cowp.  754;  Denny  v.  Manhattan  R.,  2  Deaio,  115,  affirmed  5  Ibid.  639  ; 
cases  cited  in  succeeding  section. 

*  Bell  V.  Josselyu,  3  Gray  (Mass.),  311. 


FOR  TORTS  TO  THIRD  PERSONS.  363 

Strictly,  as  applied  to  this  subject,  non-feasance  means  the 
not  doing  at  all  by  a  servant  of  the  thing  which  by  his  under- 
taking with  the  master  he  has  agreed  to  do.  Strictly,  it  does 
not  extend  to  a  case  where  a  servant  has  once  entered 
upon  the  performance  of  the  contractual  obligation  and  then 
neglected  to  do  something  which  by  his  contract  or  promise 
he  has  undertaken  to  do.  This  is  the  view  taken  of  the  dis- 
tinction between  non-feasance  and  misfeasance  in  cases  of 
gratuitous  agencies  where  the  question  arises  between  princi- 
pal and  agent,!  and  it  is  the  view  taken  by  the  best  considered 
authorities  in  cases  of  negligence  arising  between  an  agent  or 
servant  and  third  persons.  "It  is  often  said  in  the  books 
that  an  agent  is  responsible  to  third  persons  for  misfeasance 
only,  and  not  for  non-feasance.  And  it  is  doubtless  true  that 
if  an  agent  never  does  anything  toward  carrrying  out  his  con- 
tract with  his  principal,  but  wholly  omits  or  neglects  to  do  so, 
the  principal  is  the  only  person  who  can  maintain  any  action 
against  him  for  the  non-feasance.  But  if  the  agent  once 
actually  undertakes  and  enters  upon  the  execution  of  a  par- 
ticular work,  it  is  his  duty  to  use  reasonable  care  in  the  manner 
of  executing  it,  so  as  not  to  cause  any  injury  to  third  persons 
which  may  be  the  natural  consequence  of  his  acts  ;  and  he 
cannot,  by  abandoning  its  execution  midway  and  leaving 
things  in  a  dangerous  condition,  exempt  himself  from  liability 
to  any  person  who  suffers  injury  by  reason  of  his  having  so 
left  them  without  proper  safeguards.  This  is  not  non-feasance, 
or  doing  nothing ;  but  it  is  misfeasance,  doing  improperly."  ^ 

Suppose  that  a  representative  undertakes  the  general  man- 
agement of  real  estate,  agreeing  to  lease  it,  collect  the  rents, 
pay  the  taxes,  keep  it  insured,  repair  it  when  necessary  and 
so  on,  and  that  he  enters  upon  the  performance  of  his  duties, 
all  of  which  he  faithfully  performs  except  as  to  the  repairs,  and 
that,  as  to  those,  he  allows  the  premises  to  be  so  dangerously 

1  Thorne  v.  Deas,  4  Johns.  (N.  Y.)  84 ;  ante,  §§  97,  286. 

2  Osborne  v.  Morgan,  130  Mass.  102.  And  see  Bell  v.  Josselyn,  3 
Gray  (Mass.),  309,  where  a  servant  was  held  liable  for  negligently  failing 
to  examine  the  state  of  water-pipes  before  letting  the  water  into  them, 
whereby  a  lower  tenant's  rooms  were  flooded  and  damaged. 


364  LIABILITY   OF   SERVANT 

out  of  repair  that  X  is  injured  in  consequence  of  their  defec- 
tive condition ;  can  X  recover  for  his  injuries  against  the 
representative  ?  The  question  has  been  answered  in  the  nega- 
tive on  this  state  of  facts  by  the  Federal  courts  and  the  courts 
of  the  state  of  Louisiana,^  and  these  cases  are  now  regarded 
as  the  leading  American  authorities.^  Another  court  has 
reached  the  same  conclusion  where  it  was  alleged  that  the 
omission  uf  the  representative  was  malicious  and  with  the 
intent  to  injure  the  plaintiff.^  Other  courts,  however,  have 
taken  the  opposite  view,  holding  that  the  representative 
is  liable  for  his  own  negligent  omissions  in  the  management 
of  his  principal's  premises,  where  he  has  once  entered  upon 
the  discharge  of  his  duties.* 

The  latter  view  seems  more  consonant  with  sound  princi- 
ples, for  it  distinguishes  between  negligence  and  non-feasance. 
Had  the  representative  entered  upon  the  repair  of  the  premises 
and  done  his  work  ill,  he  would  undoubtedly  have  been  liable," 
Why  not  also  when  he  enters  upon  the  care  of  the  premises 
by  taking  "  possession  "  of  them  for  his  employer  and  doing  all 
that  a  possessor  should  except  repair?  If  non-feasance  were 
confined  to  cases  where  the  representative  simply  fails  to  enter 
upon  the  performance  of  his  duties  at  all,  much  confusion 
would  be  avoided  and  a  fundamental  principle  of  personal 
obligation  for  one's  own  acts  and  omissions  would  be 
vindicated.^ 

Yet  under  the  latter  view  it  must  be  observed  that  the 
representative  cannot  be  held  to  a  continuing  liability  for 
the  negligent  condition  of  premises  or  for  negligent  and  dan- 
gerous structures.     He  might  be  liable  so  long  as  he  remains 


*  Delaupy  v.  Rochereau,  34  La.  An.  1123;   Carey  v.  Rochereau,  16 
Fed.  Rep.  87. 

*  See  also  Murray  v.  Usher,  117  N.  Y.  542;  Van  Antwerp  v.  Linton, 
89  Ilun  (N.  Y.),  417;  Dean  v.  Brock,  11  Ind.  App.  507. 

*  Feltus  V.  Swan,  62  Miss.  415. 

«  Baird  v.  Shipinan,  1-32  111.  10;  Campbell  r.  Portland  Sugar  Co.,  62 
Me.  5.52,  566;  Mayer  r.  Hutchinson  Building  Co.,  104  Ala.  611. 
^  Harriman  v.  Stowe,  57  Mo.  93. 
«  See  Kelly  v.  Metropolitan  Ry.,  1895,  1  Q.  B.  944. 


FOR  TORTS  TO  THIRD  TERSONS.  365 

in  control,  but  not  after  he  has  surrendered  control  to  his 
employer  or  departed  the  service.^ 

§  292.     Misfeasance. 

Differences  of  opinion  exist  as  to  whether  particular  omis- 
sions of  duty  constitute  non-feasance  or  misfeasance,  but 
there  is  general  agreement  that  for  all  of  his  acts  or  omissions 
constituting  misfeasance  the  agent  or  servant  is  personally 
liable.2  For  all  wilful  torts  he  is  clearly  liable.^  For  all  negli- 
gent torts  amounting  to  misfeasance  he  is  as  clearly  liable.* 
The  obligation  imposed  by  the  law  upon  all  persons  cannot 
be  disturbed  by  the  creation  of  new  relations  by  contract  or 
other  undertaking  to  which  the  injured  person  is  not  a  party. 
But  it  must  appear  that  the  servant  was  in  fact  negligent ;  the 
mere  fact  that  some  act  of  his  was  a  remote  cause  of  damage 
is  not  enough.^ 

Whether  the  master  and  servant  may  be  joined  in  one 
action  as  joint  tort-feasors,  has  already  been  considered.^ 

§  293.     Liability  for  torts  of  fellow-servants. 

A  servant  is  not  liable  for  the  torts  of  his  fellow-servants 
in  wliich  he  did  not  participate  even  though  he  is  their  supe- 
rior officer."  To  this  there  is  an  exception  in  the  case  of  a 
ship-master  who  is  liable  for  the  negligence  of  all  on  ship- 
board to  the  same  extent  as  if  he  were  acting  for  himself 
alone  and  the  employees  were  his  own  servants.^  So  also  the 
managing  editor  of  a  paper  is  liable  for  a  libel  published  in  it 

1  Baird  v.  Shipman,  supra.  Cf.  Curtin  v.  Somerset,  UO  Pa.  St.  70; 
Daugherty  v.  Herzog,  145  Ind.  255. 

2  Ante,  §§  211-214. 

3  Ihid. 

4  Phelps  V.  Wait,  30  N.  Y.  78;  Bell  v.  Josselyn,  3  Gray  (Mass.),  309 ; 
Mayer  v.  Hutchinson  Building  Co.,  104  Ala.  611  ;  Wright  v.  Comptou,  53 
liid.  337  ;  Johnson  v.  Barber,  10  111.  425;  Harriman  v.  Stowe,57  Mo.  93. 

5  Hill  V.  Caverly.  7  N.  H.  215. 

6  Anfe,  §  214;  Warax  v.  Cincinnati,  &c.  R.,  72  Fed.  Rep.  637,  and 
cases  there  cited. 

'  Stone  V.  Cartwright,  6  T.  R.  411 ;  Brown  v.  Lent,  20  Vt.  529. 
8  Kennedy  v.  Ryall,  67  N.  Y.  379. 


366      LIABILITY   OF   SERVANT  FOR   TORTS   TO   THIRD   PERSONS. 

to  the  same  extent  as  if  he  were  the  proprietor,  and  this  is  so 
whether  he  knows  of  the  publication  or  not.^ 

§  294.     Public  servants ;  acta  of  state. 

The  rule  of  personal  liability  for  torts  extends  to  public  as 
well  as  to  jn-ivate  servants.  A  public  principal  is  not  ordi- 
narily liable  for  the  torts  of  his  subordinates,^  but  each  sub- 
ordinate is  liable  for  his  own  torts,  and  cannot  shield  himself 
behind  the  command  of  his  su{)erior."^ 

To  tliis  rule  there  is  one  exception.  A  public  agent  is  not 
liable  to  the  subject  of  a  foreign  state  for  an  act  done  under 
authority  of  the  agent's  state  or  duly  ratified  by  the  state,'* 
In  such  cases  the  relief  of  the  party  injured  must  be  sought 
through  his  own  state  department  from  the  government  of 
the  wrongdoer.  This  doctrine  is  applicable  only  when  the 
wrongdoer  and  the  injured  party  are  subjects  of  different 
states  and  only  when  the  wrongdoer's  state  authorizes  or 
ratifies  his  act.  The  defence  of  an  "  Act  of  State  "  is  not 
applicable  between  subjects  or  citizens  of  the  same  state.^  In 
such  cases  the  actor  is  protected  only  if  his  act  was  in  fact 
lawful. 

1  Smith  V.  Utley,  92  Wis.  133. 

2  Ante,  §  260. 

8  ]\IitchelI  V.  Harmony,  13  How.  (U.  S.)  115;  Terrill  v.  Kankiii,  2 
Bush  (Ky. ),  453 ;  Head  v.  Porter,  48  Fed.  Rep.  481 ;  Stanley  v.  Schwalby, 
85  Tex.  348. 

4  Buron  v.  Denman,  2  Ex.  107;  Secretary  of  State  for  India  v. 
Karaachee  Boye  Sahaba,  7  Moo.  lad.  App.  470,  13  Moo.  P.  C.  22 ;  Dow 
V.  Johnson,  100  U.  S.  158. 

«  Walker  v.  Baird,  1892,  A.  C.  491  ;  Head  v.  Porter,  48  Fed.  Rep.  481. 


PART  V. 

LIABILITY  OF  THIRD  PERSON   FOR  TORTS   TO  MASTER 
OR   SERVANT. 

§  295.     Introductory. 

A  third  person  may  render  himself  liable  to  the  master  by 
injuring  the  servant  so  as  to  impair  the  value  of  his  services, 
by  seducing  the  servant,  or  by  enticing  the  servant  away  from 
the  service.  He  may  render  himself  liable  to  the  servant  by 
procuring  his  discharge  from  the  service  or  by  inducing  a 
prospective  master  not  to  employ  him. 


368  LIABILITY   OF   TllIKD   PEltSON 


CHAPTER  XXVTL 

LIABILITY   OP   THIRD    PERSON    FOR   TORTS. 

§  296.     Personal  injuries  to  servant. 

A  master  is  entitled  to  the  services  of  his  servant,  and  one 
who  injures  or  restrains  the  servant  so  as  to  render  him 
unfit  to  labor  is  liable  to  the  master  for  the  resulting  damages 
occasioned  by  the  loss  of  services  whether  the  injury  be  wilful 
or  negligent.^  Thus  the  third  person  is  liable  for  an  as- 
sault,^ false  arrest,^  false  imprisonment,*  negligence,^  or  other 
tort^  to  the  servant  which  deprives  the  master  of  the  services 
to  which  he  is  entitled.  To  this  rule  there  are  two  qualifica- 
tions resting  upon  authority  but  of  doubtful  validity  :  (1)  if 
the  defendant  is  under  a  contract  duty  toward  the  servant  to 
carry  him  safely  and  owing  to  the  breach  of  this  duty  the  ser- 
vant is  injured,  negligently  or  intentionally,  the  master  can- 
not recover;"  (2)  if  the  injury  to  the  servant  results  in 
instantaneous  death  the  master  cannot  recover.^  Both  of 
these  exceptions  seem  to  be  without  solid  foundation  and 
both  have  been  criticised  and  condemned.^ 

1  Gilbert  v.  Sohwenck,  14  ^I.  &  W.  488;  Hall  r.  Hollander,  4  B.  &  C 
660;  Dixon  v.  Bell,  5  M.  &  S.  108;  Ames  v.  Union  By.  Co.,  117  Mass. 
541 ;  St.  Johnsbury,  &c.  R.  v.  Hunt,  55  Vt.  570 ;  ante,  §  176. 

2  Gilbert  v.  Schwenck,  supra. 

8  St.  Johnsbury,  &c.  R.  v.  Hunt,  supra. 
*  Woodward  ^^^Vashburn,  3  Deuio  (X.  Y.),  369. 
6  Dixon  c.  Bell,  5  M.  &  S.  198. 
6  Durden  i-.  Barnett,  7  Ala.  169. 

T  Alton  i;.  Midland  Ry.,  19  C.  B.  n.  s.  213;  Fairmount  Ry.  v.  Stutler, 
54  Pa.  St.  075;  Bigelow  on  Torts  (7th  ed.),  §§  390,  801-804. 

8  Osborn  v.  Gillett,  L.  R.  8  Ex.  88;  Bigelow  on  Torts  (7th  ed.),  §  391. 

9  Pollock  on  Torts  (5th  ed.),  pp.  59-61,  512-514.  See  also  Ames  v. 
Union  Ky.,  supra. 


FOR   TORTS.  369 

A  parent  recovers  under  the  theory  of  service  for  injuries 
to  a  minor  child,  and  may  also  recover  as  damages  the 
necessary  expenses  incurred  for  medical  attendance  and 
care.^ 

§  297.     Seduction  of  servant. 

Akin  to  the  action  for  injury  to  a  servant  is  the  action  for 
seduction  of  a  female  child  or  servant  to  whose  services  the 
parent  or  master  is  entitled.^  In  such  case  the  parent  recovers 
ostensibly  for  loss  of  service  and  must  show  some  slight  ser- 
vice ^  or  right  to  service  ^  as  the  basis  of  his  action.^  It  is  not 
enough  to  prove  the  seduction  merely  ;  damages  from  loss  of 
services  must  also  be  shown.  English  cases  seem  to  re- 
quire proof  of  pregnancy  or  other  disabling  disease,^  but  the 
American  cases  are  to  the  effect  that  where  the  proximate  I'e- 
sult  of  the  seduction  is  a  loss  of  health  incapacitating  the 
daughter  for  service  the  damages  are  sufficiently  established.'^ 
While  loss  of  service  or  the  right  to  service  must  be  shown 
as  the  basis  of  the  action,  the  law  allows  additional  substantial 
damages  to  be  awarded  to  the  parent  for  the  humiliation  and 
injury  to  his  feelings  resulting  from  the  seduction.^ 

If  after  the  death  of  the  father  the  daughter  remains  with 
and  serves  the  mother,  the  latter  may  maintain  an  action  for 
seduction  based  upon  the  loss  of  service.^  So  any  person 
actually  standing  in  loco  parentis  may  maintain  an  action,  as 

1  Hunt  V.  Wotton,  T.  Raym.  259;  Dennis  v.  Clark,  2  Cush.  (Mass.) 
347;  Horgan  v.  Pacific  Mills,  158  Mass.  402. 

2  Bigelow  on  Torts  (7th  ed.),  §§  256-273. 

8  Bennett  v.  Allcott,  2  T.  R.  1G6 ;  Carr  v.  Clarke,  2  Chit.  Rep.  260. 

*  Martin  v.  Payne,  9  Johns.  (N.  Y.)  387,  disapproving  Dean  v.  Peel, 
5  East,  45;  Mulvehall  v.  Miliward,  11  N.  Y.  343;  Furman  v.  Van  Sise, 
56  N.  Y.  435. 

6  Grinnell  v.  Wells,  7  M.  &  G.  1033 ;  Bartley  v.  Richtmyer,  4  N.  Y.  38. 
^  Eager  v.  Grimwood,  1  Ex.  61. 

7  Abrahams  v.  Kidney,  104  Mass.  222 ;  White  v.  Nellis,  31  N.  Y.  405. 

8  Phelin  v.  Kenderdine,  20  Pa.  St.  354;  Fox  v.  Stevens,  13  Minn.  272; 
Lipe  V.  Eisenlerd,  32  N.  Y.  229 ;   Lawyer  v.  Fritcher,  130  N.  Y.  239. 

9  Moran  v.  Dawes,  4  Cow.  (N.  Y.)  412;  Gray  i\  Durland,  51  N.  Y. 
424;  Furman  v.  Van  Sise,  56  N.  Y.  435;  Abrahams  v.  Kidney,  104  Mass. 
222. 

24 


370  LIABILITY    OF   THIRD    PEKSON 

a  step-fcitlicr,  brother,  aunt,  or  cousin,^  or  any  person  who  is 
actually  a  master  though  not  a  relative,"'^  though  in  the  latter 
case  damages  would  probably  be  for  loss  of  service  only.^ 

The  consent  of  the  daughter  cannot  bar  the  parent's  action. 
The  consent  of  the  parent,  however,  bars  his  action  *  or  per- 
haps such  misconduct  in  the  parental  relation  as  contributed 
to  the  injury.^  J3ut  if  the  parent's  consent  to  a  marriage  be 
obtained  by  the  false  representation  of  the  defendant  that  he 
is  single,  the  parent  may  maintain  an  action  for  seduction.^ 

§  298.     Euticing  away  a  servant. 

A  third  person  who  with  notice'^  of  the  existence  of  the  re- 
lation of  master  and  servant  entices  or  procures  the  servant 
to  quit  the  employment,^  or  who,  with  notice  of  the  relation, 
harbors  and  keeps  the  servant  of  another  as  his  servant,^  is 
liable  to  the  master  for  all  damages  resulting  therefrom.^^ 
"  A  i)crson  who  with  notice  interrupts  the  relation  subsisting 
between  master  and  servant  by  procuring  the  servant  to  de- 
part from  the  master's  service,  or  by  harboring  and  keeping 
him  as  servant  after  he  has  quit  it,  and  during  the  time  stipu- 
lated for  as  the  period  of  service,  whereby  the  master  is  in- 
jured, commits  a  wrongful  act  for  which  he  is  responsible  at 
law."  li 

1  Howard  v.  Ciowthor,  8  M.  &  W.  GOl ;  Davidson  v.  Goodall,  18  N.  II. 
423-,  Wood  on  M.  &  S.  §244. 

2  Fore.s  v.  Wilson,  Peake,  55. 

8  Bigelow  on  Torts  (7th  ed.),  §  273. 

*  HollLs  V.  Wells,  3  Penn.  L.  J.  169 ;  Seagar  v.  Slingerland,  2  Cai. 
(N.Y.)219. 

6  Reddie  v.  Sooolt,  Peake,  240;  Anthon's  N.  P.  (N.  Y.)  2G7. 

6  Lawyer  r.  Fritclier,  130  N.  Y.  239. 

">  Fores  v.  Wilson,  Peake,  55;  Stuart  v.  Simpson,  1  Wend.  (N.  Y.) 
376;  Butterfield  v.  Ashley,  6  Cush.  (Mass.)  249;  Clark  v.  Clark,  63 
N.  J.  L.  1. 

8  Hart  V.  Aldridge,  Cowp.  54;  Scidmore  v.  Smith,  13  Johns.  (N.  Y.) 
322;  Carew  v.  Rutherford,  106  Mass.  1;  Bixby  i'.  Dunlap,  56  N.  H.  456; 
Jones  V.  Blocker,  43  Ga.  331;  Haskins  v.  Royster,  70  N.  C.  601. 

9  Blake  i\  Lanyon,  6  T.  R.  221;  Sargent  v.  Mathewson,  38  X.  II.  54; 
Caughey  v.  Smith,  47  N.  Y.  244. 

10  Ante,  §  176. 

^1  Crompton,  J.,  in  Lumley  v.  Gye,  2  El.  &  Bl.  216.     In  this  case  an 


FOR  TORTS.  371 

Such  relation  may  arise  from  contract  or  from  status, 
as  in  the  case  of  an  infant  ^  or  a  wife.^  In  an  action  for 
enticement  it  must  appear  that  the  servant  is  actually  in 
the  service ;  if  he  has  already  abandoned  it  the  defendant 
cannot  be  said  to  have  enticed  him  away.^  Whether  there 
must  be  a  binding  contract  or  obligation  to  serve  is  not  clear. 
Where  the  enticement  of  one  actually  rendering  service  is 
for  an  immoral  purpose,  and  not  in  the  way  of  competition,  it 
is  held  that  it  is  immaterial  that  there  is  no  binding  contract 
of  service.^  But  where  the  enticement  is  for  a  competitive 
purpose,  that  is,  whore  defendant  entices  the  servant  at  will 
of  plaintiff  to  leave  plaintiff's  employment  and  enter  defend- 
ant's, the  decisions  are  in  conflict.^ 

As  to  who  is  a  servant  within  the  meaning  of  this  doctrine 
there  is  some  conflict.  In  a  leading  English  case  it  was  held 
that  enticing  away  an  actress  was  actionable,^  while  in  an 
American  case  this  was  held  non-actionable.  "^  In  most  juris- 
dictions, however,  this  narrower  question  has  ceased  to  be  of 
importance  in  view  of  the  broader  doctrine  concerning  the 
liability  for  inducing  breach  of  contract. 

The  doctrine  that  it  is  actionable  to  induce  a  servant  to  com- 
mit a  breach  of  a  contract  of  service  has  been  generalized  into 
the  more  comprehensive  doctrine  that  it  is  actionable  to  induce 

actress  was  induced  to  quit  the  employment  of  a  theatre  manager.  It  was 
held  that  defendant  was  liable  to  the  employer.  Coleridge,  J.,  dissented, 
maintaining  that  the  sole  liability  rested  upon  the  Statute  of  Laborers 
(23  Edw.  III.),  and  that  the  actress  was  not  a  servant  within  the  mean- 
ing of  that  statute. 

^  Caughey  v.  Smith,  supra ;  Lawyer  v.  Fritcher,  130  N.  Y.  239. 

2  Winsinore  i'.  Greenbank,  Willes,  577;  Hutcheson  v.  Peck,  5  Johns. 
(N.  Y.)  196;  Hadley  v.  Heywood,  121  Mass.  236.  •  The  action  of  a  hus- 
band is  not,  however,  solely  for  loss  of  service,  but  includes  the  loss  of 
consortium  as  well. 

8  Caughey  v.  Smith,  supra. 

4  Evans  v.  Walton,  L.  R.  2  C.  P.  615;  Ball  v.  Bruce,  21  111.  161 ;  Noice 
r.  Brown,  39  N.  J.  L.  569. 

5  Salter  v.  Howard,  43  Ga.  601  (actionable) ;  Campbell  v.  Cooper,  34 
N.  H.  49  (non-actionable).     See  next  section. 

«  Lumley  v.  Gye,  2  El.  &  Bl.  216. 

'  Bourlier  Bros.  v.  Macauley,  91  Ky.  135. 


372  LIABILITY   OF   THIRD   PEKSON 

any  contractor  to  commit  a  breach  of  his  contract,^  although 
some  cases  have  held  that  this  generalization  is  unsound.  ^ 
All  jurisdictions  agree  that  it  is  actionable  to  procure  a 
breach  of  contract  by  the  employment  of  intrinsically  un- 
lawful means,  as  force  or  fraud ;  ^  and  this  is  so  even  if  the 
contract  be  an  unenforceable  one.  ^ 

§  299.     Procuring  discharge  or  non-employment  of  servant. 

It  is  also  actionable  to  induce  or  persuade  a  master  to  dis- 
charge his  servant  with  whom  he  has  a  binding  contract  of 
service,^  except  in  tliose  jurisdictions  which  refuse  to  recog- 
nize the  general  rule  that  it  is  actionable  to  procure  a  breach 
of  contract  by  more  ])ersuasion.  *^  Even  in  those  jurisdictions 
it  is  actionable  if  unlawful  means  are  used  as  force,  intimida- 
tion, or  fraud. " 

Is  it  actionable  to  induce  or  persuade  a  master  to  discharge 
a  servant-at-will,  that  is  a  servant  who  may  be  discharged 
without  committing  a  breach  of  contract  ?  It  has  recently 
been  held  in  England,  overruling  prior  cases,  that  it  is  not 
unless  unlawful  means  are  used  to  produce  the  discharge.  ^ 
But  the  general  American  doctrine  seems  to  be  otherwise,  and 
to  ])rocced  upon  the  theory  that  intentionally  causing  damage 
to  the  servant  by  inducing  his  discharge  is  actionable  unless 
it  can  be  justified.  ^ 

^  Lumley  v.  Gye,  siipTn ;  Bowen  r.  Ilall,  6  Q.  B.  Div.  333;  Temperton 
V.  Russell,  isiKB,  1  Q.  B.  715;  Walker  v.  Croiiiii,  107  Mass.  555;  IMorau 
V.  Dunphy  (Mass.),  59  N.  E.  125;  Angle  v.  Chicago,  &c.  Ry.,  151  U.  S. 
1 ;  Jones  r.  Stanly,  7G  N.  C.  355. 

2  Ashley  v.  Dixon,  18  N.  Y.  430;  Chambers  v.  Baldwin,  91  Ky.  121; 
Boyson  v.  Thorn,  98  Cal.  578;  Glencoe  Land,  &c.  Co.  v.  Commission 
Co.,  138  Mo.  439. 

8  Ibid. ;  Aldridge  v.  Stuyvesant,  1  Hall  (X.  Y.),  210. 

4  Benton  v.  Pratt,  2  Wend.  (N.  Y.)  385;  Rice  v.  Manley,  66  N.  Y.  82. 

6  Chipley  v.  Atkinson,  23  Fla.  206. 

'  Note  2,  supra. 

'  Supra.  See  Shoe  Co.  v.  Saxey,  131  Mo.  212;  Wick  China  Co.  v. 
Brown,  104  Pa.  St.  449. 

8  Allen  r.  Flood,  1898,  A.  C.  1.  See  also  National  Protective  Ass'n 
t;.  Cuinming,  53  N.  Y.  App.  Div.  227. 

»  Plant  V.  Woods,  176  Mass.  492:  Curran  v.  Galen,  152  N.  Y.  33. 


FOR   TORTS.  373 

"  In  view  of  the  series  of  decisions  by  this  court,  we  can- 
not admit  a  doubt  that  maliciously  and  without  justifiable 
cause  to  induce  a  third  person  to  end  his  employment  of  the 
plaintiff,  whether  the  inducement  be  false  slanders  or  success- 
ful persuasion,  is  an  actionable  tort.  ...  In  the  case  of  a 
contract  of  employment,  even  when  the  employment  is  at  will, 
the  fact  that  the  employer  is  free  from  liability  for  discharg- 
ing the  plaintiff  does  not  carry  with  it  immunity  to  the  de- 
fendant who  has  controlled  the  employer's  action  to  the  plain- 
tiff's harm."  i 

Wliat  is  here  said  of  inducing  an  employer  to  discharge  a 
servant-at-will  is  also  applicable  to  cases  where  an  employer 
of  labor  is  induced  not  to  engage  the  services  of  plaintiff  at 
all.  2  In  neither  case  is  the  employer  guilty  of  any  breach  of 
an  obligation ;  the  wrong,  if  any,  is  that  of  the  defendant  in 
interfering  with  the  plaintiff's  occupation  or  means  of  liveli- 
hood. 


§  300.     Summary  of  law  as  to  interference  with  contractual  rela- 
tions. 

It  will  be  observed  that  there  are  two  different  views  enter- 
tained as  to  the  basis  of  liability  for  interference  with  contract 
relations. 

(1)  The  first  is  that  there  is  no  tort  unless  either  (a)  the 
act  induced  is  itself  unlawful,  namely,  the  breach  of  a  binding 
contract,  or  (^)  the  means  used  to  induce  the  act  are  unlaw- 
ful ;  3  And  two  jurisdictions  admit  only  the  second  test  in 
any  case  (except  possibly  the  enticement  of  servants  from 
their  masters).*  What  constitutes  unlawful  means,  and, 
particularly,  what  constitutes  intimidation  or  coercion,  cannot 
be  regarded  as  settled.  ^     (2)  The  second  doctrine  is  that  it  is 

1  Holmes,  C.  J.,  in  Moran  v.  Dunphy  (Mass.),  59  N.  E.  125. 

2  Blumenthal  v.  Shaw,  77  Fed.  Rep.  954. 
8  Allen  V.  Flood,  1898,  A.  C.  1. 

*  Chambers  v.  Baldwin,  91  Ky.  121;  Bourlier  Brothers  i;.  Macauley, 
91  Ky.  135;  Boyson  v.  Thorn,  98  Cal.  578. 

5  Vegelahn  v.  Guntner,  167  Mass.  92 ;  O'Neil  v.  Behanua,  182  Pa.  St. 
236;  :\Iackall  v.  Ratchford,  82  Fed.  Rep.  41. 


374  LIABILITY   OF   TIIIKD   TERSON   FOR   TORTS. 

an  actionable  tort  to  inflict  intentional  damage  upon  the  plain- 
tiff by  inducing  another  to  break  a  contract  with  him,  or  to 
terminate  one  without  breach,  or  not  to  enter  into  one,  unless 
there  be  a  lawful  excuse  or  justification  for  so  doing.  ^  What 
constitutes  lawful  excuse  or  justification  cannot  be  regarded 
as  settled.2 

1  Walker  v.  Cronin,  107  Mass.  555;  Moran  v.  Dunphy  (Mass.),  59 
N.  E.  125;  Chipley  v.  Atkinson,  23  Fla.  206;  Graham  v.  St.  Charles  Ry., 
47  La.  An.  214,  1(356. 

2  Vegelahu  v.  Guntner,  167  Mass.  92 ;  Hopkins  v.  Oxley  Stave  Co.,  83 
Fed.  Rep.  912.     See  37  Am.  Law  Reg.  n.  s.  p.  273. 


APPENDIX. 


NEW   YORK   FACTORS  ACT,  1830. 

L.  1830,  c.  179. 

An  Act  for  the  Amendment  of  the  Laiv  Relative  to  Principals  and 
Factors  or  Agents. 

§  1.  A  person  in  whose  name  any  merchandise  shall  be  shipped, 
shall  be  deemed  the  true  owner  thereof,  so  far  as  to  entitle  the 
consignee  of  such  m.erchandise  to  a  lien  thereon, 

1.  For  any  money  advanced,  or  negotiable  security  given  by 
such  consignee,  to  or  for  the  use  of  the  person  in  whose  name 
such  shipment  is  made  ;  and, 

2.  For  any  money  or  negotiable  security  received  by  the  per- 
son in  whose  name  such  shipment  is  made,  to  or  for  the  use  of 
such  consignee. 

§  2.  Such  lien  does  not  exist  where  the  consignee  has  notice  by 
the  bill  of  lading  or  otherwise,  when  or  before  money  is  advanced 
or  security  is  given  by  liim,  or  when  or  before  such  money  or  se- 
curity is  received  by  the  person  in  whose  name  the  shipment  is 
made,  that  such  person  is  not  the  actual  and  bona  fide  owner 
thereof.^ 

§  3.  Every  factor  or  other  agent,  intrusted  with  the  possession 
of  any  bill  of  lading,  custom-house  permit,  or  warehouse-keeper's 
receipt  for  the  delivery  of  any  such  merchandise,  and  every  such 
factor  or  agent  not  having  the  documentary  evidence  of  title,  who 
shall  be  intrusted  with  the  possession  of  any  merchandise  for  the 
purpose  of  sale,  or  as  a  security  for  any  advances  to  be  made  or 
obtained  thereon,  shall  be  deemed  to  be  the  true  owner  thereof, 
so  far  as  to  give  validity  to  any  contract  made  by  such  agent  with 

1  Sects.  1  and  2  are  now  cited  as  §  72  of  "  The  Lien  Law  "  (L.  1897, 
c.  418,  repealing  §§  1  and  2  of  L.  1830,  o.  179). 


37G  APPENDIX. 

anj'  other  person,  for  the  sale  or  dispositiou  of  the  whole  or  any 
part  of  such  merchandise,  for  any  money  advanced,  or  negotiable 
instrument  or  otlier  obligation  in  writing  given  by  such  other 
person  upon  tlie  faith  thereof. 

§  4.  Every  person  who  shall  hereafter  accept  or  take  any  such 
merchandise  in  deposit  for  any  such  agent,  as  a  security  for  any 
antecedent  debt  or  demand,  shall  not  acquire  thereby,  or  enforce 
any  right  or  interest  in  or  to  such  merchandise  or  document, 
other  than  was  possessed  or  might  have  been  enforced  by  such 
agent  at  the  time  of  such  deposit. 

§  5.  Nothing  contained  in  the  two  last  preceding  sections  of 
this  act,  shall  be  construed  to  prevent  the  true  owner  of  any  mer- 
chandise so  deposited,  from  demanding  or  receiving  the  same, 
upon  repayment  of  the  money  advanced,  or  on  restoration  of  the 
security  given,  on  the  deposit  of  such  merchandise,  and  upon  sat- 
isfying such  lien  as  may  exist  thereon  in  favor  of  the  agent  who 
may  have  deposited  the  same;  nor  from  recovering  any  balance 
which  may  remain  in  the  hands  of  tlie  person  with  whom  such 
merchandise  shall  have  been  deposited,  as  the  produce  of  the  sale 
thereof,  after  satisfying  the  amount  justly  due  to  such  person  by 
reason  of  sucli  deposit. 

§  6.  Nothing  contained  in  this  Act  shall  authorize  a  common 
carrier,  warehouse-keeper,  or  other  person  to  whom  merchandise 
or  other  property  may  be  committed  for  transportation  or  storage 
only,  to  sell  or  hypothecate  the  same. 

§  7.    [Repealed  by  L.  1886,  ch.  593.] 

§  8.  Nothing  contained  in  the  last  preceding  section,  shall  be 
construed  to  prevent  the  Court  of  Chancery  from  compelling  dis- 
covery, or  granting  relief  upon  any  bill  to  be  filed  in  that  court 
by  the  owner  of  any  merchandise  so  intrusted  or  consigned, 
against  the  factor  or  agent  by  whom  such  merchandise  shall  have 
been  applied  or  sold  contrary  to  the  provisions  of  the  said  section, 
or  against  any  person  who  shall  have  been  knowingly  a  party  to 
such  fraudulent  application  or  sale  thereof ;  but  no  answer  to  any 
such  bill  shall  be  read  in  evidence  against  the  defendant  making 
the  same,  on  the  trial  of  any  indictment  for  the  fraud  charged  in 
the  bill. 


FACTORS   ACTS.  377 

ENGLISH  FACTORS  ACT,  1889. 

52  &  53  Vict.  c.  45. 

An  Act  to  Amend  and  Consolidate  the  Factors  Acts. 

[26th  August,  1889.] 

Be  it  enacted  by  the  Queen's  most  Excellent  Majesty,  by  and  with 
the  advice  and  consent  of  the  Lords  Spiritual  and  Temporal, 
and  Commons,  in  this  present  Parliament  assembled,  and  by 
the  authority  of  the  same,  as  follows  :  — 

Preliminary. 

1.  For  the  Purposes  of  this  Act  —  (1)  The  expression  "mer- 
cantile agent"  shall  mean  a  mercantile  agent  having  in  the  cus- 
tomary course  of  his  business  as  such  agent  authority  either  to 
sell  goods,  or  to  consign  goods  for  the  purpose  of  sale,  or  to  buy 
goods,  or  to  raise  money  on  the  security  of  goods  :  (2)  A  person 
shall  be  deemed  to  be  in  possession  of  goods  or  of  the  documents 
of  title  to  goods,  where  the  goods  or  documents  are  in  his  actual 
custody  or  are  held  by  any  other  person  subject  to  his  control  or 
for  him  or  on  his  behalf:  (3)  The  expression  "goods"  shall 
include  wares  and  merchandise :  (4)  The  expression  "  document 
of  title  "  shall  include  any  bill  of  lading,  dock  warrant,  warehouse- 
keeper's  certificate,  and  warrant  or  order  for  the  delivery  of 
goods,  and  any  other  document  used  in  the  ordinary  course  of 
business  as  proof  of  the  possession  or  control  of  goods,  or  author- 
izing or  purporting  to  authorize,  either  by  endorsement  or  by 
delivery,  the  possessor  of  the  document  to  transfer  or  receive 
goods  thereby  represented :  (5)  The  expression  "  pledge "  shall 
include  any  contract  pledging,  or  giving  lien  or  security  on,  goods, 
whether  in  consideration  of  an  original  advance  or  of  any  further 
or  continuing  advance  or  of  any  pecuniary  liability :  (6)  The  ex- 
pression "  person  "  shall  include  any  body  of  persons  corporate  or 
unincorporate. 

Disposition  by  Mercantile  Agents. 

2.  —  (1)  "Where  a  mercantile  agent  is,  with  the  consent  of  the 
owner,  in  possession  of  goods  or  of  the  documents  of  title  to 
goods,  any  sale,  pledge,  or  other  disposition  of  the  goods,  made 


378  APPENDIX. 

by  him  when  acting  in  the  ordinary  course  of  business  of  a  mer- 
cantile agent,  shall,  subject  to  the  provisions  of  this  Act,  be  as 
valid  as  if  he  were  expressly  authorized  by  the  owner  of  the 
goods  to  make  the  same ;  provided  that  the  person  taking  under 
the  disposition  acts  in  good  faith,  and  has  not  at  the  time  of  the 
disposition  notice  that  the  person  making  the  disposition  has  not 
the  authority  to  make  the  same.  (2)  Where  a  mercantile  agent 
has,  with  the  consent  of  the  owner,  been  in  possession  of  goods 
or  of  the  documents  of  title  to  goods,  any  sale,  pledge,  or  other 
disposition,  which  would  have  been  valid  if  the  consent  had  con- 
tinued, shall  be  valid  notwithstanding  the  determination  of  the 
consent :  provided  that  the  person  taking  under  the  disposition 
has  not  at  the  time  thereof  notice  that  the  consent  has  been  de- 
termined. (3)  Where  a  mercantile  agent  has  obtained  possession 
of  any  documents  of  title  to  goods  by  reason  of  his  being  or  hav- 
ing been,  with  the  consent  of  the  owner,  in  possession  of  the 
goods  represented  thereby,  or  of  any  other  documents  of  title  to 
the  goods,  his  possession  of  the  first-mentioned  documents  shall, 
for  the  purposes  of  this  Act,  be  deemed  to  be  the  consent  of  the 
owner.  (4)  Yov  the  purposes  of  this  Act  the  consent  of  the 
owner  shall  be  presumed  in  the  absence  of  evidence  to  the  con- 
trary. 

3.  A  pledge  of  the  documents  of  title  to  goods  shall  be  deemed 
to  be  a  pledge  of  the  goods. 

4.  AVhere  a  mercantile  agent  pledges  goods  as  security  for  a 
debt  or  liability  due  from  the  pledgor  to  the  pledgee  before  the 
time  of  the  ])ledge,  the  pledgee  shall  acquire  no  further  right  to 
the  goods  than  could  have  been  enforced  by  the  pledgor  at  the 
time  of  the  pledge. 

5.  The  consideration  necessary  for  the  validity  of  a  sale, 
pledge,  or  other  disposition,  of  goods,  in  pursuance  of  this  Act, 
may  be  either  a  payment  in  cash,  or  the  delivery  or  transfer  of 
other  goods,  or  of  a  document  of  title  to  goods,  or  of  a  negotiable 
security,  or  any  other  valuable  consideration ;  but  where  goods 
are  pledged  by  a  mercantile  agent  in  consideration  of  the  delivery 
or  transfer  of  other  goods,  or  of  a  document  of  title  to  goods,  or 
of  a  negotiable  security,  the  pledgee  shall  acquire  no  right  or  in- 
terest in  the  goods  so  pledged  in  excess  of  the  value  of  the  goods, 
documents,  or  security  when  so  delivered  or  transferred  in  ex- 
change. 

6.  For  the  purposes  of  this  Act  an  agreement  made  with  a 


FACTORS   ACTS.  379 

mercantile  agent  through  a  clerk  or  other  person  authorized  in 
the  ordinary  course  of  business  to  make  contracts  of  sale  or  pledge 
on  his  behalf  shall  be  deemed  to  be  an  agreement  with  the  agent. 

7.  —  (1)  Where  the  owner  of  goods  has  given  possession  of  the 
goods  to  another  person  for  the  purpose  of  consignment  or  sale, 
or  has  shipped  the  goods  in  the  name  of  another  person,  and  the 
consignee  of  the  goods  has  not  had  notice  that  such  person  is  not 
the  owner  of  the  goods,  the  consignee  shall,  in  respect  of  advances 
made  to  or  for  the  use  of  such  person,  have  the  same  lien  on  the 
goods  as  if  such  person  were  the  owner  of  the  goods,  and  may 
transfer  any  such  lien  to  another  person.  (2)  Nothing  in  this 
section  shall  limit  or  affect  the  validity  of  any  sale,  pledge,  or 
disposition  by  a  mercantile  agent. 

Disjiositlons  hy  Sellers  and  Buyers  of  Goods. 

8.  Where  a  person,  having  sold  goods,  continues,  or  is,  in  pos- 
session of  the  goods  or  of  the  documents  of  title  to  the  goods,  the 
delivery  or  transfer  by  that  person,  or  by  a  mercantile  agent  act- 
ing for  him,  of  the  goods  or  documents  of  title  under  any  sale, 
pledge,  or  other  disposition  thereof,  or  under  any  agreement  for 
sale,  pledge,  or  other  disposition  thereof,  to  any  person  receiving 
the  same  in  good  faith  and  without  notice  of  the  previous  sale, 
shall  have  the  same  effect  as  if  the  person  making  the  delivery  or 
transfer  were  expressly  authorized  by  the  owner  of  the  goods  to 
make  the  same. 

9.  Where  a  person,  having  bought  or  agreed  to  buy  goods, 
obtains  with  the  consent  of  the  seller  possession  of  the  goods  or 
the  documents  of  title  to  the  goods,  the  delivery  or  transfer,  by 
that  person  or  by  a  mercantile  agent  acting  for  him,  of  the  goods 
or  documents  of  title,  under  any  sale,  pledge,  or  other  disposition 
thereof,  or  under  any  agreement  for  sale,  pledge,  or  other  dispo- 
sition thereof,  to  any  person  receiving  the  same  in  good  faith  and 
without  notice  of  any  lien  or  other  right  of  the  original  seller  in 
respect  of  the  goods,  shall  have  the  same  effect  as  if  the  person 
making  the  delivery  or  transfer  were  a  mercantile  agent  in  pos- 
session of  the  goods  or  documents  of  title  with  the  consent  of  the 
owner. 

10.  Where  a  document  of  title  to  goods  has  been  lawfully 
transferred  to  a  person  as  a  buyer  or  owner  of  tlie  goods,  and  that 
person  transfers  the  document  to  a  person  who  takes  the  docu- 


380  APPENDIX. 

ment  in  good  faith  and  for  valuable  consideration,  the  last-men- 
tioned transfer  shall  have  the  same  effect  for  defeating  any 
vendor's  lien  or  right  of  stoppage  in  transitu  as  a  transfer  of  a 
bill  of  lading  has  for  defeating  the  right  of  stoppage  in  transitu. 

Supplemental. 

11.  For  the  purposes  of  this  Act,  the  transfer  of  a  document 
may  be  by  endorsement,  or,  where  the  document  is  by  custom  or 
by  its  express  terms  transferable  by  delivery,  or  makes  the  goods 
deliverable  to  the  bearer,  then  by  delivery. 

12.  —  (1)  Nothing  in  this  Act  shall  authorize  an  agent  to  ex- 
ceed or  depart  from  his  authority  as  between  himself  and  his  prin- 
cipal, or  exempt  him  from  any  liability,  civil  or  criminal,  for  so 
doing.  (2)  Nothing  in  this  Act  shall  prevent  the  owner  of  goods 
from  recovering  the  goods  from  an  agent  or  his  trustee  in  bank- 
ruptcy at  any  time  before  the  sale  or  pledge  thereof,  or  shall  pre- 
vent the  owner  of  goods  pledged  by  an  agent  from  having  the 
right  to  redeem  the  goods  at  any  time  before  the  sale  thereof,  on 
satisfying  the  claim  for  which  the  goods  were  pledged,  and  pay- 
ing to  the  agent,  if  by  him  required,  any  money  in  respect  of 
which  the  agent  would  by  law  be  entitled  to  retain  the  goods  or 
the  documents  of  title  thereto,  or  any  of  them,  by  way  of  lien  as 
against  the  owner,  or  from  recovering  from  any  person  with  whom 
the  goods  have  been  pledged  any  balance  of  money  remaining  in 
his  hands  as  the  produce  of  the  sale  of  the  goods  after  deducting 
the  amount  of  his  lien.  (3)  Nothing  in  this  Act  shall  prevent 
the  owner  of  goods  sold  by  an  agent  from  recovering  from  the 
buyer  the  price  agreed  to  be  paid  for  the  same,  or  any  part  of  that 
price,  subject  to  any  right  of  set-olf  on  the  part  of  the  buyer 
against  the  agent. 

13.  The  provisions  of  this  Act  shall  be  construed  in  amplifica- 
tion and  not  in  derogation  of  the  powers  exercisable  by  an  agent 
independently  of  this  Act. 

14.  The  enactments  mentioned  in  the  schedule  to  this  Act  are 
hereby  repealed  as  from  the  commencement  of  this  Act,  but  this 
repeal  shall  not  affect  any  right  acquired  or  liability  incurred 
before  the  commencement  of  this  Act  under  any  enactment 
hereby  repealed.^ 

1  Repeals  4  Geo.  IV.  c.  83;  6  Geo.  IV.  c.  94;  5  &  6  Vict.  c.  39;  40  & 
41  Vict.  c.  39. 


EMPLOYEKS'    LIABILITY   ACT.  381 

15.  This  Act  shall  commence  and  come  into  operation  on  the 
first  day  of  January  one  thousand  eight  hundred  and  ninety. 

16.  This  Act  shall  not  extend  to  Scotland.^ 

17.  This  Act  may  be  cited  as  the  Factors  Act,  1889. 


MASSACHUSETTS   EMPLOYERS'   LIABILITY  ACT 

OF   1887,   WITH   AMENDMENTS   TO 

JANUARY   1,   1901. 

Statute  1887,  ch.  270. 

An  Act  to  extend  and  regulate  the  Uahility  of  employers  to  make  com- 
pensation for  personal  injuries  suffered  by  employees  in  their 
service. 

§  1.  Where,  after  the  passage  of  this  Act,  personal  injury  is 
caused  to  an  employee  who  is  himself  in  the  exercise  of  due  care 
and  diligence  at  the  time,  — 

(1.)  By  reason  of  any  defect  in  the  condition  of  the  ways,  works, 
or  machinery  connected  with  or  used  in  the  business  of  the 
employer,  which  arose  from  or  had  not  been  discovered  or 
remedied  owing  to,  the  negligence  of  the  employer,  or  of 
any  person  in  the  service  of  the  employer  and  intrusted  by 
him  with  the  duty  of   seeing   that   the   ways,   works,  or 
machinery  were  in  proper  condition ;  or 
(2.)  By  reason  of  the  negligence  of  any  person  in  the  service  of 
the  employer,  intrusted  with  and  exercising  superintend- 
ence, whose  sole  or  principal  duty  is  that  of  superintend- 
ence, or,  in  the  absence  of   such   superintendent,  of   any 
person  acting  as  superintendent  with  the  authority  or  con- 
sent of  such  employer ;  ^  or 
(3.)  By  reason  of  the  negligence  of  any  person  in  the  service  of 
the  employer  who  has  the  charge  or  control  of  any  signal, 
switch,  locomotive  engine,  or  train  upon  a  railroad,  — 
the  employee,  or,  in  case  the  injury  results  in  death,  the  legal 
representatives  of  such  employee,  shall  have  the  same  right  of 
compensation  and  remedies  against  the  employer  as  if  the  em- 

^  Extended  to  Scotland,  with  slight  modifications,  by  53  &  5i  Vict, 
c.  40. 

*  As  amended  St.  1894,  c.  499. 


382  APPENDIX. 

ployee  had  not  been  an  employee  of  nor  in  the  service  of  the  em- 
ployer, nor  engaged  in  its  work. 

And  in  case  such  death  is  not  instantaneous,  or  is  preceded  by 
conscious  suffering,  said  legal  representatives  may  in  the  action 
brought  under  this  section,  except  as  hereinafter  provided,  also 
recover  damages  for  sucli  death.  The  total  damages  awarded 
hereunder,  both  for  said  death  and  said  injury,  shall  not  exceed 
five  thousand  dollars,  and  shall  be  apportioned  by  the  jury  be- 
tween the  legal  representatives  and  the  persons,  if  any,  entitled, 
under  the  succeeding  section  of  this  Act,  to  bring  an  action  for 
instantaneous  death.  If  there  are  no  such  persons,  then  no 
damages  for  such  death  shall  be  recovered,  and  the  damages,  so 
far  as  the  same  are  awarded  for  said  death,  shall  be  assessed  with 
reference  to  the  degree  of  culpability  of  the  employer  herein,  or 
the  person  for  whose  negligence  he  is  made  liable.^ 

A  car  in  use  by  or  in  the  possession  of  a  railroad  company 
shall  be  considered  a  part  of  the  ways,  or  machinery  of  the  com- 
pany using  or  having  the  same  in  possession,  within  the  meaning 
of  this  Act,  whether  such  car  is  owned  by  it  or  by  some  otlier 
company  or  person. ^ 

One  or  more  cars  in  motion,  whether  attached  to  an  engine  or 
not,  shall  constitute  a  train  within  the  meaning  of  this  Act.^ 

Any  person  who,  as  a  part  of  his  duty  for  the  time  being, 
physically  controls  or  directs  the  movements  of  a  signal,  switch 
or  train  shall  be  deemed  to  be  a  person  in  charge  or  control  of  a 
signal,  switch  or  train  within  the  meaning  of  this  Act.^ 

§  2.  Where  an  employee  is  instantly  killed,  or  dies  without 
conscious  suffering,  as  the  result  of  the  negligence  of  an  employer, 
or  of  the  negligence  of  any  person  for  whose  negligence  the  em- 
ployer is  liable  under  the  provisions  of  this  Act,  the  widow  of  the 
deceased,  or,  in  case  there  is  no  widow  the  next  of  kin,  provided 
that  such  next  of  kin  were  at  the  time  of  the  death  of  sucli  em- 
ployee dependent  upon  the  wages  of  such  employee  for  support, 
may  maintain  an  action  for  damages  therefor,  and  may  recover  in 
the  same  manner,  to  the  same  extent,  as  if  the  death  of  the  de- 
ceased had  not  been  instantaneous,  or  as  if  the  deceased  had  con- 
sciously suffered. 

1  This  paragraph  was  added  by  St.  1892,  c.  200. 

2  This  paragraph  was  added  by  St.  1893,  c.  3.')9. 
•  This  paragraph  was  added  by  St.  1897,  c.  491. 


employers'  liability  act.  383 

§  3.  Except  in  actions  brought  by  the  personal  representatives 
under  section  one  of  this  Act  to  recover  damages  for  both  the  in- 
jury and  death  of  an  employee,  the  amount  of  compensation  re- 
ceivable under  this  Act  in  cases  of  personal  injury  sliall  not 
exceed  the  sum  of  four  thousand  dollars.  In  case  of  death  which 
follows  instantaneously  or  without  conscious  suffering,  compen- 
sation in  lieu  thereof  may  be  recovered  in  not  less  than  five  hun- 
dred and  not  more  than  five  thousand  dollars,  to  be  assessed  with 
reference  to  the  degree  of  culpability  of  the  employer  herein,  or 
the  person  for  whose  negligence  he  is  made  liable ;  and  no  action 
for  the  recovery  of  compensation  for  injury  or  death  under  this 
Act  shall  be  maintained,  unless  notice  of  the  time,  place,  and 
cause  of  the  injury  is  given  to  the  employer  within  sixty  days, 
and  the  action  is  commenced  within  one  year,  from  the  occur- 
rence of  the  accident  causing  the  injury  or  death.  The  notice  re- 
quired by  this  section  shall  be  in  writing,  signed  by  the  person 
injured  or  by  some  one  in  his  behalf;  but  if  from  physical  or 
mental  incapacity  it  is  impossible  for  the  person  injured  to  give 
the  notice  within  the  time  provided  in  said  section,  he  may  give 
the  same  within  ten  days  after  such  incapacity  is  removed,  and 
in  case  of  his  death  without  having  given  the  notice  and  without 
having  been  for  ten  days  at  any  time  after  his  injury  of  sufficient 
capacity  to  give  the  notice,  his  executor  or  administrator  may 
give  such  notice  within  sixty  days  after  his  appointment.  But 
no  notice  given  under  the  provisions  of  this  section  shall  be 
deemed  to  be  invalid  or  insufficient  solely  by  reason  of  any  inac- 
curacy in  stating  the  time,  place  or  cause  of  the  injury :  provided, 
it  is  shown  that  there  was  no  intention  to  mislead,  and  that  the 
party  entitled  to  notice  was  not  in  fact  misled  thereby.^ 

§  4.  Whenever  an  employer  enters  into  a  contract,  either  writ- 
ten or  verbal,  with  an  independent  contractor  to  do  part  of  such 
employer's  work  or  whenever  such  contractor  enters  into  a  con- 
tract with  a  sub-contractor  to  do  all  or  any  part  of  tlie  work  com- 
prised in  such  contractor's  contract  with  the  employer,  such 
contract  or  sub-contract  shall  not  bar  the  liability  of  the  employer 
for  injuries  to  the  employees  of  such  contractor  or  sub-contractor, 
by  reason  of  any  defect  in  the  condition  of  the  ways,  works,  ma- 
chinery, or  plant,  if  they  are  the  property  of  the  employer,  or 
furnished  by  him,  and  if  such  defect  arose,  or  had  not  been  dis- 

"^  As  amended  and  re-enacted  by  St.  1900,  c.  446. 


384  APPENDIX. 

covered  or  remedied,  through  the  negligence  of  the  employer,  or 
of  some  person  intrusted  by  him  with  the  duty  of  seeing  that 
they  were  in  proper  condition. 

§  5.  An  employee  or  his  legal  representatives  shall  not  be  en- 
titled under  this  Act  to  any  right  of  compensation  or  remedy 
against  his  employer  in  any  case  where  such  employee  knew  of 
the  defect  or  negligence  wliich  caused  the  injury,  and  failed 
within  a  reasonable  time  to  give,  or  cause  to  be  given,  informa- 
tion thereof  to  the  employer,  or  to  some  person  superior  to  him- 
self in  the  service  of  the  employer,  who  had  intrusted  to  him 
some  general  superintendence. 

§  0,  Any  employer  who  shall  have  contributed  to  an  insurance 
fund  created  and  maintained  for  the  mutual  purpose  of  indem- 
nifying an  employee  for  personal  injuries  for  which  compensa- 
tion may  be  recovered  under  this  Act,  or  to  any  relief  society 
formed  under  chapter  two  hundred  and  forty-four  of  the  Acts  of 
the  year  eighteen  hundred  and  eighty-two,  as  authorized  by  chap- 
ter one  hundred  and  twenty-five  of  the  Acts  of  the  year  eighteen 
hundred  and  eighty-six,  may  prove,  in  mitigation  of  the  damages 
recoverable  by  an  employee  under  this  Act,  such  proportion  of 
the  pecuniary  benefit  which  has  been  received  by  such  employee 
from  any  such  fund  or  society,  on  account  of  such  contribution 
of  said  employer,  as  the  contribution  of  such  employer  to  such 
fund  or  society  bears  to  the  whole  contribution  thereto. 

§  7.  This  Act  shall  not  apply  to  injuries  caused  to  domestic 
servants  or  farm  laborers  by  other  fellow-employees,  and  shall 
take  effect  on  the  first  day  of  September,  eighteen  hundred  and 
eighty-seven. 


INDEX. 


INDEX. 


Abandonment : 


Page 


of  ageucy  by  agent » 82 

See  Renunciatiok. 

Acceptance  of  Bill : 

liability  of  agent »    246 

Accounting : 

as  duty  of  agent 112-115 

keeping   accounts .     113 

rendering  accounts 113 

set-ofE 114 

delivery  of  funds 114 

agent  not  to  deny  principal's  title 112 

Acquiescence : 

ratification   by 48-50 

Action : 

as  evidence  of  ratification 48 

auctioneer  may  bring,  when 153,  262 

by  and  against  undisclosed  principal 158-177 

to  recover  money  paid  by  mistake  or  fraud 214-215 

in  equity 225 

against  agent 230-249,  255-257 

against  agent  or  principal 249-253 

against  third  person  by  agent 257-262 

Admissions  of  Agent : 

cannot  prove  agency 178 

when  admissible  against  principal 180-184 

when  inadmissible 178, 185 

Adverse  Interest: 

agent  not  to  assume 34,110-112 

renders  admissions  incompetent 185 

Agency : 

general  signification 5-6, 10  n,  14 

distinguished  from  other  relations 6-10,  120-121 

division  of  subject 10,  21-22 

formation  of 23-76 

by  agreement 24-41 


383  INDEX. 

Agency — continued.  Page 

by  contract 24-39 

by  gratuitous  assent 40-41 

by  ratiticatioii 42-61 

by  estoppel 62-71 

by  necessity 72-76 

termination  of 77-90 

by  agreement 77-78 

by  revocation 78-82,  96-99 

by  renunciation 82,  100 

by  operation  of  law 82-87 

by  change  of  law 83 

by  change  in  subject-matter 83 

by  death        84 

by  insanity 84 

by  illness 85 

by  marriage 85 

by  constraint  of  law 85 

by  bankruptcy 86 

by  war 86 

irrevocable  agencies       87-90 

unlawful  interference  with 224,  267 

Agent  : 

definition 17,  18 

distinguished  from  servant 10-17 

classification 19-21 

general  and  special  agents 19-21,  132-134 

competency  of 34 

joint-agents 35 

sub-agents 36,  115-120 

gratuitous  agents 40,  122-125 

renunciation  of  agency 82, 100 

death  of,  insanity,  illness,  etc 84-86 

irrevocable  interest  in  agency 87-90 

compensation  of 9--103 

reimbursement  of 103 

indemnity  to 104 

obligations  to  principal 106-125 

rights  against  principal 92-105 

public  agent 1'^*)  -^^ 

obligations  to  third  parties 229-253,  263-267 

rights  against  third  parties 257-262,  267 

really  the  principal 259 

Agreement : 

formation  of  agency  by 24-41 

termination  of  agency  by 77-78 


INDEX.  389 

Alien :  Page 

as  principal 33,  86 

Apparent  Authority : 

doctrine  of 15,17,65-68,128-132 

of  general  and  special  agents 132-134 

of  public  agents 134 

elements  of 135-140 

illustrations  of 140-147 

of  servant 301 

Apparent  Ownership.  See  Indicia  of  Ownership. 

Assault : 

liability  of  master  for  servant's 307 

Assignment : 

of  contract  of  service 10 

of  rights  and  obligations  of  principal 105 

of  obligations  of  agent 115-120 

of  obligations  generally 158 

Association.     See  Voluntary  Societies. 

Assumption  of  Risk : 

by  servant 352 

Attorneys  at  Law : 

powers  and  duties  as  agents 154 

Auctioneers  : 

powers  and  duties  as  agents 153 

Authority  of  Agent : 

how  conferred 5,  23,  26 

how  terminated 77 

apparent  authority 128-132 

general  and  special  agents 132-134 

public  agents •     .     .     .     134 

elements  of 135-140 

illustrations 140-147 

in  particular  agencies 148-157 

Bailment : 

distinguished  from  agency 8 

Bank: 

liability  for  collection  of  paper 119 

gratuitous  directors 124 

rights  and  liabilities  on  paper  signed  by  cashier       242,  243,  245,  248 

See  Cashier. 
Bankruptcy  : 

effect  on  agency 86 


390  INDEX. 

Bill  of  Lading :  Page 

issue  of  fictitious -U6 

Brokers  : 

powers  and  duties  as  agent 151 

Carrier  : 

liability  to  passenger  for  servant's  wilful  torts 310 

Cashier  of  Bank : 

powers  and  duties  as  agent 155 

signing  negotiable  instruments        242,243,245,248 

Charities : 

liability  for  torts  of  agents  and  servants 318 

Clubs.     See  Voluntary  Societies. 

Collection  Agent : 

powers  of 144 

Compensation  of  Agent  or  Servant : 

how  fixed 92-94 

how  secured 94-95 

for  unauthorized  act 95 

conditional 95-96 

upon  revocation  of  agency 96-99 

upon  renunciation  of  agency 100 

■when  acting  for  both  parties 101 

for  illegal  services 102 

Compulsory  Employment  or  Service: 

meaning 286 

liability  of  master  for  servant  compulsorily  employed  ....     286 

status  of  one  compelled  to  serve 288 

parent  and  child 289 

husband  and  wife 289 

Conductor  : 

agent  or  servant 18 

agent  by  necessity 75 

Consideration  : 

in  contract  of  agency 26 

Constituent : 

generic  term 5 

*        includes  principal  and  master 5-6 

Contract : 

object  of  agency  to  create 12 

agency  by 24-39 

liy  agent  for  disclosed  principal 127-1')7 

by  agent  for  undisclosed  principal ir)8-177 

privitv  of 158-1(35 

inducing  breach  of 209,  224,  207,  370 


INDEX.  391 

Contract  —  continued.  Pagfe 

inducing  termination,  -without  breach 209,  224 

interference  with,  generally 372-373 

liability  of  agent  on 250 

Contractor,  Independent : 

distinguished  from  agent 9 

Contributory  Negligence : 

of  servant 356 

Conversion : 

liability  of  third  person  to  principal  for 216 

liability  of  agent  to  third  person  for 264-266 

Convict : 

whether  a  fellow-servant 288 

Corporations : 

as  principals 31 

executing  specialty 38 

ratification  by 44,234 

notice  to  agent  of 190 

municipal,  liability  for  act  of  agent 316 

County : 

liability  for  torts  of  oflBcers 315 

Course  of  the  Employment : 

distinguished  from  scope  of  the  authority 195 

basis  of  master's  liability 298 

in  case  of  wilful  torts 305 

Crimes  of  Servants  : 

liability  of  master  for 323 

absolute  liability 324 

authority  to  commit 327 

negligent  failure  to  control 328 

Custom  : 

authority  implied  from 138-140 

effect  on  liability  of  agent 252 

Damages  : 

for  revocation  of  agency 96-98 

for  remuneration  of  agency 100-101 

for  disobedience  or  negligence  of  agent 106-109,  117 

for  breach  of  warranty  of  authority 232 

exemplary,  liability  of  master  for 313 

See  Liability;  Obligation. 

Death  : 

terminates  agency 84 

effect  on  contracts 253 


392  INDEX. 

Deceit :  Pa^ 

an  anomalous  tort 4  n,  12,  13 

liability  of  principal  for  agent's 68,  197-200 

liability  of  third  person 223,  207 

liability  of  agent 232,  204 

See  Fraud. 

Declarations  of  Agent : 

whether  admissible  against  principal 178-185 

Deed.     See  Skalp;d  Instruments. 

Defamation : 

liability  of  principal  for  agent's 209,  309 

liability  of  master  to  servant  for 357 

Del  credere  Agency : 

definition 21 

distinguished  from  sale 7 

nature  of  liability 120-122 

Delegation  of  Duties  by  Agent : 

sub-agents 36 

no  assignment  of  obligations 115-120 

delegation  of  duties 116-117 

authorized  appointment  of  sub-agents 118-120 

See  Sub-Servants. 
Dissolution  of  Agency  : 

forms  of 77-90 

Divisible  Contract: 

\vhether  contract  of  service  is 100 

Documents  of  Title.     See  Indicia  of  Ownership. 
Duties.    See  Liabilities  ;   Obligation. 

Election : 

to  ratify  or  disaffirm 59 

to  hold  agent  or  principal 109 

Employers'  Liability  Acts  : 

provisions  of 345,  381-384 

Enticing  away  Servant : 

liability  for 370 

Estoppel : 

basis  of  principal's  liability 13-15,  17 

agency  by 62-71 

meaning  of 62-64 

relied  upon  to  establish  agency 65 

relied  upon  to  establish  extent  of  agency 66,  128-135 

application  to  torts .     68,  195,  197-211,  296 


INDEX.  393 

Estoppel  —  continued.  Page 

to  deny  ownership 217-222 

to  deny  that  agent  is  principal 174 

limits  of  doctrine 70-71 

Evidence : 

to  show  that  agent  is  acting  for  undisclosed  principal      .     .     .     164 

to  vary  written  instrument 170,  250-252 

of  agent  to  establish  agency 179 

admissions  of  agent  as 178-185 

Execution  of  Instruments  : 

sealed  instruments 37,  170,  237 

negotiable  instruments 238-249 

under  statute  of  frauds 37 

simple  contracts 250,  254 

Factors  : 

powers  and  liabilities  of 149 

Factors  Acts : 

provisions  and  effect  of 147,  219-222,  375-381 

False  Arrest: 

by  agent,  liability  of  principal 210 

by  servant,  liability  of  master 308 

False  Representations: 

by  agent  as  to  authority 230-233 

by  agent  for  principal 197-208 

Fello-w-Servants  : 

the  fellow-servant  rule 331 

evolution  of  the  rule 332 

who  are 335 

vice-principal 338 

superior-officer  test 339 

non -assignable  duty  test 340 

summary 344 

incompetent 344 

liability  of  one,  to  another 361 

liability  of  one,  for  another's  torts 365 

Fictitious  Principals : 

no  ratification 44 

liability  of  agent 233 

Foreign  Principal : 

liability  of 170,  213 

liability  of  agent  of 236 

Forgery : 

ratification  of 58 


394  INDEX. 

Form  :  Page 

of  appointment  of  agent 36 

of  ratification  of  contract 55 

See  Seal;   Statute  of  Frauds;  Execution  of  Instruments. 

Fraud : 

of  agent  on  principal 110,  148 

of  agent  on  third  person 197-208,232,2(34 

for  benefit  of  principal 200 

for  benefit  of  agent 202 

of  third  person  on  principal 215,  223 

Frauds,  Statute  of.    See  Statute  of  Frauds. 

Gambling  Contracts : 

employment  to  make  illegal 39,  102 

General  Agent: 

distinguished  from  special  agent 19-21,  132-134 

whether  distinction  of  any  value 20 

authority  of 132-134 

Good  Faith : 

as  duty  of  agent 110-112 

Gratuitous  Agents: 

liability  of  principal 40 

liability  of  agent  to  principal 40,  122-125,  360 

Holding  out: 

works  an  estoppel  against  principal 15,  64,  130,  195 

See  Estoppel. 

Husband  and  "Wife : 

liability  of  husband  for  necessaries  furnished  wife 72 

liability  for  torts  of  wife 289 

Identity: 

fiction  of ^'  ^* 

as  applicable  to  notice 186-19- 

as  applicable  to  undisclosed  principals 161 

Illegality.     See  Legality  of  Contract. 

Illness  or  Incapacity : 

terminates  agency 

Impossibility : 

discharge  of  agency  by 8--o7 

change  in  law 

change  in  subject-matter °^ 

dcatli,  insanity,  war,  etc 84-87 

Incompetency.     See  Parties, 


INDEX.  395 

Indemnity  :  Page 

to  agent  by  prin3ipal 104 

Independent  Contractor : 

distinguished  from  servant 9,  274 

employer  not  liable  for  torts  of 274 

exceptions  to  rule : 

selecting  competent  contractor 275 

contracting  for  nuisance 275 

contracting  for  unsafe  result 276 

statutory  requirements 276 

contract  liability  to  do  work  safely 277 

extra-hazardous  work 277 

safety  of  premises 278 

interference  by  employer 278 

resumption  of  control  by  employer 279 

Indicia  of  O'wnership  : 

principal  conferring  on  agent 8,174,217 

Infants  : 

as  principals 27 

as  agents 34,  74 

ratification  by 53-55 

Insanity.     See  Lunatics. 

Insurance  Agent : 

general  powers  of 143 

Irrevocable  Agencies : 

power  coupled  with  an  interest 88 

power  coupled  with  an  obligation 89 

Joint  Parties: 

as  principals 33 

as  agents 35 

Joint  Tort-feasors: 

principal  and  agent  as 266 

Judgment : 

as  evidence  of  an  election 169 

Knowledge  : 

of  agent  as  notice  to  principal 186 

Lease: 

distinguished  from  agency 8 

Legality  of  Contract: 

agency  for  illegal  objects 39 

ratification  of  illegal  act 56-59 


396  INDEX. 

Legality  of  Contract  —  continued.  Page 

.subsequent  illegality (53 

coiiipeusatiou 102,  104 

Liability  : 

basis  of  principal's  or  master's 13-17 

of  principal  to  agent 92-105 

of  agent  to  principal 100-125 

of  principal  to  third  party 127-211 

of  third  party  to  principal 212-227 

of  agent  to  third  party 229-257,  2f;:}-267 

of  third  party  to  agent 257-202,  2G7 

of  master  for  torts  of  servants 295-321 

of  master  to  servant 330  et  seq. 

Libel : 

by  agent  or  servant 209,  309,  328 

Lien : 

tif  agent  for  compensation 94 

Lunatics : 

as  principals 28-30 

as  agents 34 

insanity  terminates  agency 84 

Manager  of  business : 

powers  of 142 

Marriage  : 

effect  on  agency 85 

Married  Women  : 

as  principals 30,  38,  85 

as  agents 34 

See  HusBAXD  and  Wife. 
Master  : 

distinguished  from  principal 10-17 

basis  of  liability  for  tort  of  servant 13-17,194 

conditions  of  liability  for  torts  of  servant 295 

wrongdoer  must  be  defendant's  servant 295 

serA-ant  must  be  about  master's  business 297 

servant  must  be  acting  within  course  of  the  employment   .  298 

acts  commanded 299 

acts  ratified 300 

acts  master  leads  servant  reasonably  to  believe  author- 
ized       301 

acts  impliedly  authorized 302 

acts  for  master's  benefit 804 

acts  for  servant's  benefit 305 

■wilful  or  malicious  torts 305 


INDEX.  397 

Master  —  continued,  Page 

iu  furtherance  of  employment 305 

wilful  injuries  to  passengers 310 

misuse  of  dangerous  instrumentalities 311 

liability  for  exemplary  damages 313 

imputed  notice  to 314 

liability  for  penalties 322 

liability  for  crimes  of  servant 323 

absolute  liability 324 

authorized  acts 327 

negligent  failure  to  control 328 

liability  for  injuries  to  one  servant  by  another 330 

classification  of  servants 330 

fellow-servant  rule 331 

statement  of 331 

evolution  of ^32 

common  service 335 

vice-principal  doctrine 338 

superior  officer  test 339 

non-assignable  duty  test 340 

summary 344 

incompetent  fellow-servants 344 

employers'  liability  acts 345 

liability  to  servant  for  his  own  torts 350 

negligent  operative  act 350 

negligent  performance  of  non-assignable  duties     ....  351 

assumption  of  risk  by  servant 352 

contributory  negligence  of  servant 356 

wilful  torts  to  servants 357 

action  against  third  person 368 

for  personal  injury  to  servant 368 

for  seduction  of  servant 369 

for  enticing  away  servant 370 

Master  and  Servant : 

law  of,  distinguished  from  law  of  principal  and  agent  .     .     .     10-17 
See  Master;  Servant. 
Misrepresentation  : 

liability  of  principal  for  agent's 62-71,  197-211 

liability  of  agent  for,  as  to  authority 230-233 

See  Estoppel. 

Mistake : 

effect  of,  on  ratification ^1 

money  paid  under '^'^^ 

Municipal  Corporations  : 

liability  for  torts  of  officers 316 


398  INDEX. 

Necessity :  Page 

agency  by 72-76 

agency  of  wife 72-74 

agency  of  infant  child 74 

agency  of  sliipraaster 74 

agency  of  nnpaid  vendor '5 

agency  of  conductors,  drivers,  etc 75-7G 

Negligence : 

of  agent  generally 108,  3G0 

of  gratuitous  agent 122-125,360 

of  agent  toward  third  parties 263 

See  Torts. 

Negotiable  Instruments : 

agent  authorized  to  execute 146 

parties  cannot  be  introduced  into  by  parol     ....    165,171,176 

title  to,  when  diverted  by  agent 147,  216 

liability  of  agent  who  signs 238-249 

signature  to,  construction 241-247 

indorsement  of 247 

Non-assignable  Duties: 

doctrine  of  master's 340,  351 

Non-feasance  : 

liability  of  agent  for 263,  362 

Notice  : 

ratification  of  unauthorized 57 

of  termination  of  agency 58,  60,  62,  80,  81 

to  agent,  when  binding  on  principal 186-192 

imputed  to  master 314 

Nuisance  : 

contracting  for 275 

criminal  liability  of  master 328 

Obedience: 

as  duty  of  agent 106-108 

Obligation : 

incurred  by  representation 4 

primary  antecedent 3,  10,  11,  15, 193 

secondary  substituted 3,  11,  16,  193 

resting  on  assent 24-61 

created  by  estoppel 62-71 

created  by  necessity 72-76 

of  principal  to  agent 92-105 

non-assignability 105,  115-120,  158 

of  agent  to  principal 106-125 

of  principal  to  third  party 127-211 

of  third  party  to  principal 212-227 


INDEX.  399 

Obligation  —  continued.  Page 

of  agent  to  third  party 229-257,  263-207 

of  third  party  to  agent 257-262,  267 

See  Liability. 

OflScers.     See  Public  Agknts  ;   Supkrior  Officers. 

Ostensible  Authority  : 

test  of  principal's  liability 15,  17,  65-68,  128-147,  218 

meaning 129 

See  Apparent  Authority. 

Ostensible  Ownership : 

conferred  on  agent  works  estoppel 8,  217-222 

Ownership.  See  Indicia  of  Ownership. 

Parent  and  Child  : 

liability  of  parent  for  necessaries  furnished  child 74 

liability  of  parent  for  torts  of  child 289 

Parol  Evidence : 

to  introduce  undisclosed  principal  into  a  contract   .     .     164, 176,  250 

to  explain  ambiguity 239 

Parties  to  Contract  of  Agency : 

competency  of 27-36 

infants 27, 34 

insane       28 

married  women 30 

corporations 31 

partnerships        32 

clubs,  etc 32 

aliens • 33 

joint  parties 33,  35 

Partnership : 

distinguished  from  agency 7 

as  principal 32 

as  agent 35 

executing  specialty 38 

Passengers  : 

liability  of  carrier  for  wilful  injuries  to 310 

Payment: 

authority  of  agent  to  receive 138,  140, 144,  150,  153 

Penalties  : 

liability  of  master  to,  for  acts  of  servant 322 

Physician : 

engaged  by  servant 75 

whether  a  servant 284 

Pilot : 

whether  a  servant 286 


400  INDEX. 

Pledge :  P^ 

of  i>rincipal's  goods  by  agent  ....      141,  150-151,  152,  219-222 

Po'wer  coupled  ■with  an  Interest : 

iiieaiiiiig  of  phrase 88 

Power  coupled  with  an  Obligation  : 

iiuauiiig  of  phrase 89 

Power  of  Attorney  : 

how  coustrued 135 

Powers  of  Agent.  See  Autiiouiit  of  Agent. 

Principal : 

distinguished  from  master 10-17 

basis  of  liability 13-17 

competency  of 27-33,  53 

joint-principals      • 33 

gratuitous 40 

ratification  by 42-61 

estoppel  of 02-71 

by  necessity 72-76 

renunciation  by 78-81 

dcatli,  insanity,  etc.  of 81-87 

obligations  to  agents 02-105 

cannot  assign  rights  or  obligations 105 

rights  against  agent 106-125 

liabilities  to  third  persons 127-211 

bound  by  admissions  of  agent 178-185 

bound  by  notice  to  agent 186-192 

rights  against  third  parties 212-227 

Privity  of  Contract : 

between  sub-agent  and  principal 115-120 

between  third  party  and  undisclosed  principal 158-165 

Promoters  : 

ratification  of  contracts  of 44,  233-234 

Prudence : 

as  duty  of  agent 108 

Public  Agents : 

several  or  joint 36 

authority  of 134 

liability  of 254,  366 

Public  Principal: 

liability  on  agent's  contracts 134 

liability  for  servant's  torts 315 

liability  of  state  and  its  agencies 315 

liability  of  municipal  corporations 316 

liability  of  public  officers 317 


INDEX.  401 

Public  Principal  —  continued.  Page 

liability  of  public  charities •     .     .     .     .  318 

liability  of  private  person  served  by  public  officer 321 

Purchase : 

agent  authorized  to 141 

Quasi  contract : 

in  recovering  for  necessaries 73 

liability  of  third  person  in 214-216,  202 

liability  of  agent  in 255-257 

Ratification : 

meaning 42 

elements  of 43-59 

existing  principal  necessary 44 

act  done  professedly  for  principal 44-45 

assent  of  principal 46 

by  conduct 48 

by  silence 49 

must  be  in  toto 50 

must  be  free  from  mistake  or  fraud 50 

has  third  party  right  to  recede  ? 52 

competency  of  principal 53 

form  of  ratification 55 

legality  of  act  ratified 56 

of  forgery 58 

of  notice  of  intent 57 

of  void  act 58 

of  torts 300 

legal  effects  of 59-61 

is  irrevocable 59 

as  between  pi'incipal  and  third  party 59 

as  between  principal  and  strangers 60 

as  between  principal  and  agent 60,  95 

as  between  agent  and  third  party 61 

Reimbursement  of  Agent: 

liability  of  principal 103 

Remedies : 

of  agent  against  principal 94,  96 

of  principal  against  agent 112-115 

of  principal  against  third  party 222,  225 

of  third  party  against  agent 229  et  ser/. 

of  agent  against  third  party 258-262 

of  third  parties  against  principal  for  agent's  misrepresentations     196 

Renunciation  of  Agency: 

when  possible 82 

26 


402  INDEX. 

Renunciation  of  Agency  —  continued.  Page 

notice  of ^~ 

effect  of 82,  lUO 

Representation  (Agency) : 

moaning  of 3-5,  10  n. 

basis  of  doctrines  of 11 

kinds  of 5 

principal  and  agent 17 

master  and  servant 17 

distinction  between 10-13 

Representative : 

generic  term 5 

includes  agent  and  servant 5 

Res  gestae: 

meaning  and  application 180 

Revocation  of  Agency: 

wlien  possible  . 78 

what  amounts  to 79 

notice  of 80 

effect  of 81,96 

when  impossible 87-90 

See  Terminatio'n  of  Agency. 

Sale: 

distinguished  from  agency 7 

authority  of  agent  to  make 140 

by  factors 149,  219 

by  brokers 151 

by  auctioneer 153 

by  shipmaster 150 

recovery  of  property  sold  without  authority 216-222 

Scope  of  Authority:     See  Authokity  ;    Apparent  Authority. 

Seal: 

when  necessary 37,  55 

Sealed  Instruments : 

authority  to  execute 37,  55 

authority  to  fill  blanks  in 38 

parties  cannot  be  introduced  into  by  parol     ....    170,  176,  258 

liability  of  agent  who  signs 237 

construction  of  signatures 170,  237 

Seduction: 

of  servant 3G9 

Servant: 

definition 17,  18,  271 

distinguished  from  agent 10-17 


INDEX.  403 

Servant  —  cnniinued.  Page 

may  be  also  agent 18 

classification 21   330 

who  is  and  who  is  not  a 273  295 

independent  contractor 274 

transfer  of  service   . 280 

compulsory  employment 286 

sub-servauts 291 

volunteers 292 

liability  of  master  for  torts  of 295 

liability  of  public  master  for  torts  of 315 

liability  of  public  charity  for  torts  of 318 

liability  of  private  person  served  by  public  officer 321 

liability  of  master  for  crimes  of ;322 

liability  of  master  to  one  servant  for  torts  of  a  fellow-servant   .  330 

fellow-servants 331 

vice-principals 338 

superior  officers 339 

master's  non-assignable  duties  to 341 

incompetent,  master's  liability  for 344 

rights  under  employers'  liability  acts 345 

master's  liability  to,  for  his  own  torts 350,  357 

assumption  of  risk  by 352 

contributory  negligence  of 356 

liability  of  servant  for  his  torts 359 

liability  to  master 360 

liability  to  fellow-servant 361 

liability  to  third  persons 362 

non-feasance 362 

misfeasance 365 

liability  for  torts  of  fellow-servants 365 

liability  of  third  person  for  torts  to 367 

personal  injuries  to 368 

seduction  of 369 

enticing  away 370 

procuring  discharge  of 372 

Set-off: 

by  agent 114 

to  agent 174 

Shipmaster: 

agency  of 74 

powers 156 

Silence: 

whether  a  form  of  ratification 49 

Special  Agent  : 

definition 19 


404  INDEX. 

Special  Agents  —  continued.  Page 

distint,niislRMl  from  general  agent 19-21,  1:52 

wlielliLT  distinction  of  any  value 19-20 

autiioiity  of 132-134 

State: 

liability  for  torts  of  officers 315 

acts  of,  as  a  defence 3G6 

Statute  of  Frauds: 

agency  for  more  tlian  a  year 36 

agent  authorized  in  writing 37 

ratification 5fj 

parol  evidence  rule 105 

Sub-agent: 

how  appointed 36 

power  of  agent  to  appoint 115-120 

notice  to 191 

torts  of 291 

Sub-servants: 

whether  master  liable  for  acts  of 291 

See  Sub-Agent. 
Superior  OfiBcer: 

whether  a  vice-principal 339 

Termination  of  Agency : 

forms  of 77-90 

See  Agency. 

Title  to  Property  : 

agent  not  to  deny  principal's 112 

when  sold  without  authority 216-222 

Torts  : 

of  agent,  liability  of  principal  for 16-17,  193-211 

ratification  of  .    " 50-59,  194 

liability  of  third  person  to  principal  for 216-222 

liability  of  agent  to  third  person  for 203-267 

joint  liability  of  agent  and  principal 206 

liability  of  third  person  to  agent  for 207 

chief  subject-matter  of  law  of  master  and  servant  ....    12,  271 

liability  of  master  for  servant's 10-17,  194,  295 

liability  of  public  agencies  for  servant's 315 

liability  of  master  to  one  servant  for  another  servant's     .     .     .     330 

liability  of  master  to  servant  for  his  own 350 

liability  of  servant  for  his  own 3.59 

liability  of  third  person  for 367 

See  Master;   Servant. 


INDEX.  405 

Transfer  of  Service  :  Page 

general  rule 10,  280 

hiring  horses  and  driver 280 

hiring  machine  and  operator 283 

servant  sent  to  work  on  another's  premises 284 

physicians  employed  to  treat  servants  or  passengers    ....  284 

sleeping  car  porters 285 

Trust  Funds: 

following  trust  funds 225 

Trusts: 

distinguished  from  agency 7 

constructive 225 

following  trust  funds 225 

Unauthorized  Acts  : 

basis  of  principal's  liability  for U-17,  60,  128-132 

rjitification  of 42-Gl 

compensation  for 95 

liability  of  agent  to  third  party 230-233 

Undisclosed  Principal : 

general  doctrines 158-165 

liability  of 162,  166-172 

rights  of 164,  172-177 

liability  of  agent  of 249 

Usage.     See  Custom. 

Vendor  : 

agency  of  unpaid 75 

Vice-Principal : 

doctrine  of 338 

test  as  to  who  is 338 

superior  officer  test 339 

non-assignable  duty  test 340 

summary 314 

Voluntary  Societies  : 

as  principals 32,  234 

liability  of  agent  of 234 

Volunteer: 

whether  his  acts  render  involuntary  master  liable   .  -   .     .     .     .  292 

whether  he  may  recover  for  injury  occasioned  by  a  servant  .     .  292 

"War: 

effect  on  agency 33,  86 

"Warranty : 

authority  of  agent  to  give 141 

authority  of  factor  to  give 150 


406  INDEX. 

Warranty  —  continued.  Page 

authority  of  broker  to  give loi 

autliority  of  auotioiioer  to  give 153 

"Warranty  of  Authority : 

liability  of  agent  on 231,  254 

"Wife  : 

agency  of 5,  72-7 1 

as  principal      .     .     '. 30 

*  See  Married  Women. 

Wilful  Torts: 

liability  of  master  for  servant's 305,310,311 

liability  of  master  to  servant  for 357 

to  servant 368 


UNIVERSITY  OF  CAUFORNIA  LIBRARY 

Los  Angdes 

This  book  is  DUE  on  the  last  date  stamped  below. 


OCT  i  ^  1978 
C«r  library  l^»c*d 

OCT  2  5  1978 


PSD  1916     8/77 


U'     ^M    ^l  '.^     V  \n^. 


f^iU-.  r\  fiJitlf^ 


_  f/ 


LAW  LTBUARY 
UNIVERSITY  OF  CALIFORNIA 


//' 


UC  SOUTHERN  Rf  GIONAL  UBRAf-;  /  f  AULlT/ 


AA    000  785  575    2 


